maximising the lifetime value of every enquiry

Like many commercial property developers, Donald Trump is often described as transactional – viewing business on a deal-by-deal basis rather than a ‘lifetime value’ basis.

I will resist the temptation to get into this debate and suggest that being transactional is not the best way to maximise long-term performance. The lifetime value of a customer is a critical consideration if performance is to be optimised.

The facts are:

  • Returning customers have a lower acquisition cost
  • Returning customers are easier to convert again
  • Returning customers spend more than first-time customers
  • Referred customers are easier to sell to, given higher trust
  • Referred customers spend more and refer again more often

A recent survey in the United States confirmed the old maxim that 80% of profits come from 20% of clients and that 20% of clients invariably represent repeat purchasers and referrals. Further, another study found that the success rate in selling to a repeat customer is 60 – 70%, while the success rate for a new customer is just 5 – 20%.

Businesses not only need to focus on the lifetime value of each customer, but they need a documented strategy to ensure that the lifetime value of each customer is maximised – addressing repeat business and referrals – and, indeed, the average sale per customer. This issue will be the focus of a future series.

Business all too often focuses on enquiry generation. While this is a critically important issue, another issue deserves a great deal more attention than it receives. That issue is maximising the lifetime value of each enquiry generated. Indeed, while enquiries are the critical starting point, maximising the lifetime value of each enquiry is the key to maximising profitability and overall performance.

Maximising the lifetime value of each enquiry involves maximising:

  • Enquiry conversion rates.
  • The average sale per customer.
  • Repeat purchase rates.
  • Referral rates.

Focusing on maximising the lifetime value of each enquiry delivers two critical benefits:

  • Increased revenue.
  • Lower marketing costs.

That focusing on the lifetime value of each enquiry increases revenue should be self-evident. The more each customer spends, the greater the revenue. That focusing on the lifetime value of each customer is supported by the following:

  • Maximising conversion rates reduced the dependency on the expensive promotion required to drive enquiries.
  • Maximising the average sales per customer and margins increases the return for little or no additional cost.
  • Repeat business and referral customers are significantly cheaper to generate than new customers.

Pareto’s 80/20 rule has been part of various theories about business for years. Sometimes it is just a clever rule to trot out, and sometimes it is supported by research. A study in the United States by the Gartner Group found evidence to suggest that 80% of an organisation’s future profits will come from 20% of their existing clients. Further, an HBR study found that new customers cost 5 to 25 times more than the cost of retaining an existing customer.


  • A 5% increase in retention can increase profitability by up to 95%
  • 68% of customers leave a brand because they believe it has become indifferent to them.
  • 29% of customers switch brands because they are annoyed by a lack of staff knowledge.
  • 32% of customers switch brands because they do not want to talk to multiple agents.

Business in Australia pays far too little attention to retaining and developing existing customers. To appreciate this, you need only walk into 90% of the retail outlets in this country. Then you will realise how little value is placed on existing customers and that those valuing and developing existing customers are often owned overseas – Zara, Ikea, and Apple, for example.

Most of the points made in this article are equally relevant to B to C and B to B. While most of the points are equally relevant to marketing offline, online or in an omnichannel environment – the last section specifically addresses marketing online.


Central to maximising the performance of any business is maximising the lifetime value of each enquiry. Maximising the lifetime value of each enquiry maximises the return on the promotion associated with generating each enquiry. It drives revenue up and marketing costs down. The lifetime value of each enquiry is central to maximising conversion rates, margins, average sales per customer, repeat business rates, and referral rates.

Here are five tips for – maximising conversion rates in 2021.

  1. To maximise sales – first, maximise conversion rates.

Some years ago, a client called me and suggested that he needed to increase his advertising spend. Thinking it was already high, I asked him – why? He perhaps not surprisingly answered – because sales are falling. On analysis, I found that sales were falling, but not due to a lack of advertising. In fact, his advertising spend per sale was already far too high.

After a review, I established that what had changed was his conversion rates. Enquiries were the same as the previous year, as was the quality of those enquiring. What had changed was the competency and approach of his sales team – largely due to a higher-than-average turnover in staff.

I talked to the marketing manager of a very large property developer the other day, who suggested that conversion rates were one of his biggest problems. He further indicated that he believed his business could achieve a higher sales rate with fewer but better sales staff, supported by a telemarketing capability. Like so many businesses, both were suffering from lower than acceptable conversion rates – leading to a higher than acceptable cost per sale. As it turns out, this problem seems to be common and worldwide. A recent US study found that only 22% of businesses were satisfied with their conversion rates.

Maximising conversion rates is such an important issue. It directly impacts the advertising or marketing cost per sale and the overall number of customers. Therefore, the number that can be further developed and ultimately the overall return on investment.

Many factors can limit conversion rates. In my experience, the most common include:

  • An undifferentiated product – placing too much pressure on the sales process.
  • Sales staff not developing the empathy necessary to establish a relationship.
  • A customer journey that that is not engaging, too difficult or simply unpleasant.
  • The wrong attitude, systems or technology needed to follow up every enquiry.

All of these issues are readily addressed and need to be addressed well if advertising budgets are increased or to reduce those budgets.

INSIGHT – Place conversion rate at the top of the agenda, above driving enquiries. Create a culture that recognises the importance of conversion rates.

  1. To maximise conversion rates – target the smallest possible market.

The venture capitalist Mark Cuban once noted that the three most important rules of business are:

  • Target the smallest possible market
  • Demonstrate a strategic competitive advantage
  • Recognise that the ‘customer owns your arse’.

I would argue that the first of these rules is both counter-intuitive and critically important. It is certainly one of the keys to maximising enquiry conversion rates.

Apple is, depending on the month, the largest or second-largest corporation in the world. Despite this, the market share of Apple in its two key markets is not as high as many might think:

  • Tablets – 27% market share.
  • Smartphones – 16% market share.

While Apple may seek to increase its share of these two markets, its priorities are – fully exploiting the potential of the market they have – maximising conversion rates, margins, and loyalty. To achieve these outcomes, Apple must understand its market better than anyone and address or exceed the expectations of those markets better than anyone. The larger and more diverse their market, the more difficult this is.

The team at Apple recognise that a market share much above 30% in any product category is not only expensive to secure but difficult to sustain and even more difficult to rationalise. The fact is. It is impossible to be all things to all people, and it is very difficult to be all things to even a small group of people.

This is why Mark Cuban notes the importance of focusing on the smallest possible market. This is also why author Seth Godin highlights the importance of selling more to existing customers ahead of attracting new customers. Understanding a market better than anyone and tailoring the product and strategies to directly address the needs, wants and expectations of the market – better than any other organisation – opens up the possibility of dominating a segment of the market in a way that secures conversion rates, margins, repeat business and referrals.

INSIGHT – Never try to be all things to all people. The smaller the market – the better you can understand that market, the better you can tailor your offering to that market.

  1. To maximise conversion rates – define ‘qualified leads.’

I receive emails daily from shysters offering lead generation services – which in my experience, are of little value. Thanks to their high advertising budgets, I talk to clients who achieve very high enquiry rates while achieving meagre conversion rates. In my experience, the critical issue with enquiries or leads is not the number but the quality. To maximise conversion rates, it is prudent to secure qualified enquiries. The unqualified enquiries just waste time and resources.

A ‘qualified enquiry’ is a ‘genuine prospect’ – one with a better than 50% likelihood of conversion. A recent study by software vendor, Salesforce, found that for their clients:

  • On average – 79% of leads are not converted
  • Just 5% of leads are considered high quality by salespeople.

While these statistics will vary by industry and business, the underlying point is apparent and entirely consistent with the experience of most of the salespeople with whom I speak. Indeed, for many businesses, the numbers are worse than this.

It is one thing to maximise the number of enquiries, but quite another to generate qualified enquiries that can be readily converted. This is both a sales and productivity issue. It impacts the performance of the business and the mindset of the salesperson.

Ensuring that qualified enquiries are maximised requires a clear definition of what a qualified enquiry means and a clear understanding of what a qualified prospect looks like. Ask yourself – in your business – what are the characteristics of an enquiry with a better than 50% likelihood of purchase.

The easy answer here might be – the target market. However, many businesses I come across struggle to define their target market, especially the all-important psychographics. Further, not all members of the target market represent genuine prospects. A qualified enquiry or genuine prospect might need to be more tightly defined than the overall target market. Genuine prospects may, for example, differ by marketing channel – direct mail, telemarketing and face to face, or for online and in-store sales. A genuine prospect is more than a member of the target market. They are also a decision-maker with control of the cash.

INSIGHT – Identify as precisely as possible the characteristics of a qualified enquiry and then implement a strategy that targets that cohort explicitly. 

  1. To maximise conversion rates, precisely define the value proposition.

Research by Impact Communications found that 70% of purchase decisions are made with the express intention of solving a specific problem. This suggests that the best leads, qualified enquiries and genuine prospects are people who recognise that they have a specific problem and see a business or product as having the potential to address that problem to their satisfaction.

This highlights the importance of clearly articulating:

  • The problems the brand can solve.
  • The value of the solution on offer.

To maximise qualified enquiries, it is helpful to ensure that you understand the problem the customer wants to solve, how that problem manifests itself, and what a qualified enquiry is looking for in terms of a solution. Research suggests that demonstrating a capacity to solve 3 – 4 consumer ‘problems’ creates the highest likelihood of a qualified enquiry.

However, yours will often not be the only business or brand that can address the need or solve the problem. Consequently, it will be critical to communicate a clear value-proposition or point of difference – that makes your business appear to be the best option – the one most likely to provide the optimal solution.

Ideally, the value-proposition communicated should:

  • Be as specific and tangible as possible
  • Incorporate a product that is unique and remarkable
  • Address the enquirers problem better than the alternatives
  • Be demonstrated in a tangible way to achieve credibility

Essentially, this is all about demonstrating to potential enquirers that you understand their problem and that your solution offers superior value, providing a solution that the competition. This sounds intuitive; my experience suggests that few businesses do this well – and still, fewer salespeople have the knowledge and skills to address these issues well.

INSIGHT – Define the problem you are solving and demonstrate a value proposition that proves you can solve the problem better than your competitors.

  1. To maximise conversion rates – frame your value proposition.

Recent research by Adobe found that 57% of email recipients consider a message to be spam if it isn’t evidently relevant to their immediate needs. Another study found that personalised emails have a 14% higher click-through rate.

While these findings are specific to email, the implications are equally relevant to all aspects of marketing. They are particularly relevant to marketing designed to drive qualified enquiries or genuine prospects. It is much easier to drive qualified enquiry and secure genuine prospects when the messaging is personalised, and the communication is framed in terms relevant to the target market.

It is important to ensure that the problem being addressed and the value proposition being delivered by the brand or business is framed in familiar and relevant terms to the primary target audience. Addressed well, framing can ensure that the potential enquirer understands the issue in terms that they relate to and in a way that supports a sale.

To ensure this occurs, it is important to use language that the target audience relates to. There is even the potential to create a unique language or a unique framework that the audience can own.

This requires an in-depth understanding of the target market. The better you understand the audience, the better you will be able to customise the message and the language. In so doing, you will frame the problem and solution in terms that the audience relates to and will encourage qualified members of that audience to enquire.

Most importantly, avoid jargon and industry language, and remember, using platitudes and hyperbole tend to damage credibility.

Well known Australian advertising identity John Singleton once noted that it is very difficult for a Porsche driving copywriter to write for a blue-collar audience. To address this, he spent time on AFL game days in bay 13 at the MCG drinking Victoria Bitter and listening to the ‘punters’ talk, paying careful attention to what they said and the language they used to say it.

This points to the importance of getting close to the audience to ensure that messages and language used in communication can be framed in a way they understand and with which they can engage.

INSIGHT – Understand your target audience well enough to frame the problem you can solve and the value proposition you offer in terms that they will engage with and relate to..

  1. To maximise conversion rates – demonstrate your value proposition.

I read with incredulity a recent study that found that just 22% of businesses in the United States go to the trouble of testing their value proposition. I can only assume that the remaining 78% use their intuition or piece together research on customer needs to establish the optimal value proposition.

The beat value proposition is, of course, the value proposition that appeals most to the primary target market. The best value proposition is rarely the one that works best for the vendor and is very often not the value proposition that appeals most to the business owner or marketing manager – both of whom may or may not be in the primary target market.

The importance of the value proposition in marketing is well documented. The merits of testing the shortlist of options may not be as well documented and is certainly not well understood.

As important as having the right value proposition is ensuring that potential customers are aware of that value proposition and recognise it as credible and important. It is one thing to highlight your value proposition in your advertising, but quite another to demonstrate it during the sales process.

Indeed, very few businesses that articulate a clear value proposition – actually demonstrate the capability to deliver on that value proposition during the sales process. Once the sales process has begun, it is no longer good enough to highlight the value proposition. If conversions are to be maximised – the sales process should incorporate the demonstration of that value proposition or, at the very least, how that value proposition will be delivered.

Demonstrating the value proposition or the capacity to deliver a value proposition will always be more powerful (and therefore more likely to deliver a sale) than simply talking about it, Given the value proposition is 100% relevant to the needs, wants and expectations of the primary target market (those making qualified enquiries).

This, in turn, requires that you understand the needs, wants and expectations of your primary target market. Research is helpful, although there is rarely value in asking people what they want. It is far better to identify what they are having issues with – craft the value proposition around the solution to those issues – and then test your options to determine the best.

INSIGHT – Rather than telling prospects about the value your product can deliver – use the sales process to demonstrate it – and thus increase conversion rates.

  1. To maximise conversion rates – educate your market.

I receive emails weekly, if not more often, from shysters offering lead generation services. I also talk to clients who have very high enquiry rates, thanks to their high advertising budgets but achieve a low proportion of qualified enquiries. This is the fourth of 10 THOUGHTS addressing strategies for maximising qualified enquiries and genuine prospects.

I would define a qualified enquiry or genuine prospect as one where there is a better than 50% likelihood of conversion. I also recognise that there is usually a sales funnel and acknowledge the importance of minimising the time wasted on unqualified enquiries in that funnel.

Recent research in the United States found that 95% of buyers chose to purchase a product from a vendor that provided content to help them navigate each stage of the buying process. Another study found that 61% of potential purchasers want relevant information throughout the sales journey and respond well when provided.

Over recent years, marketing publications have had much to say about the value of ‘content’. This research, along with a plethora of other studies, demonstrates the importance of content in helping potential enquirers take the journey towards enquiring, becoming a genuine prospect, and eventually purchasing. Content builds the credibility of the provider.

One study found that 82% of purchasers view five or more pieces of content.

For this type of content strategy to be effective, it is essential that it:

  • Addresses the issues of concern to the potential purchaser
  • Highlights the additional considerations relevant to your USP
  • Recognises the problems and needs that are being addressed
  • Is branded but also objective and directly sells the brand
  • Guides the potential purchaser through the journey

Ideally, content should also:

  • Include independent sources to maximise the perception of objectivity
  • Incorporate questions to provide insights into information needs
  • Provide objective reviews from previous purchasers

Used well, content can be a very effective tool for maximising the level of qualified enquiry and securing the maximum number of genuine prospects. All indications are that it will become even more important, especially where that content is:

  • Video
  • Interactive
  • Current

Content helps to educate your market. As such, it can be very helpful in driving qualified enquiries.

There is also evidence to suggest that the use of high-quality content can reduce reliance on advertising, thereby reducing the cost of marketing.

INSIGHT – Given that up to 80% of all new content online is video and access to video content is now an expectation for those who are not inclined to read, the use of video is paramount. 

  1. To maximise conversion rates – make purchasing as easy as possible.

Research reported in the Harvard Business Review found that suppliers that make buying easy are 62% more likely to win a high-quality sale. This was found to be particularly relevant to high margin goods and services.

This is just one of many studies suggesting that making the purchase process as simple and as easy as possible increases the level of qualified enquiry and, ultimately, increases sales and profitability.

Despite this, there are so many businesses that:

  • Refuse to take a particular brand of credit card or require a minimum purchase
  • Demand that an enquirer open an account or join before making a purchase
  • Offer excessively long delivery times on online or offline purchases
  • Fail to keep adequate stock on hand
  • Require an enquirer to come in, rather than offering to visit the prospect
  • Provide an online ordering process that is complex and involved

These and similar issues prevent the exchange of millions of dollars in transactions for a wide range of businesses every day. The potential enquirer can almost be heard saying – ‘it is just too hard.’

Making it as easy as humanly possible to make a purchase is a powerful means of facilitating qualified enquiries. No one wants to put any more effort into a purchase than they need to.

Unfortunately, many businesses in Australia look at purchases from their own perspective rather than the customer’s perspective. They develop purchase processes that suit their needs and reduce their costs while making it unnecessarily difficult for the consumer to inquire.

This is a critical issue. There is real potential in many sectors for a business to leverage ‘ease of purchase’ as its competitive advantage. There is potential for organisations to increase qualified enquiry by continually reviewing their process and requirements, making it easier to lodge an enquiry and allowing the customer to secure what they want as easily as possible.

INSIGHT – Eliminate every barrier to lodging an enquiry and making a purchase. Review all processes and requirements and make purchasing as easy as possible. 

  1. To maximise conversion rates – solve problems.

I hate vacuum cleaning with a passion. Having said that, I probably hate it no less than anyone reading this missive. As a result, I have no doubt that a vacuum cleaner is a ‘grudge purchase’. I have certainly seen it as such.

Recently, however, I was at a friend’s home, and some dry food was split. I begrudgingly offered to vacuum up the mess. Alas, my offer was accepted, and I was given directions to the vacuum cleaner. As it turned out, however, the experience of vacuuming the mess was a delight. More importantly, the vacuum cleaner was a delight. It was the latest Dyson.

The story of Dyson vacuum cleaners is an interesting one. James Dyson, the founder, having watched someone vacuum one day, note just how hard it was and set about the process of making it easier. He identified all of the problems associated with vacuum cleaning and the vacuum cleaners on offer. He then designed a series of solutions to address these problems.

The early models addressed many of the problems. Later models addressed most of the others until Dyson had a vacuum cleaner that made vacuum cleaning, if not a pleasure – certainly less arduous. James Dyson then applied this approach to a range of other items – always solving problems.

The Dyson approach – rather than finding out what they can sell consumers – involves understanding the problems experienced by consumers in everyday life and applying their expertise in engineering to address these problems and, in so doing, develop a product that serves the needs of consumers better than any competitor.

This is the problem-solving approach to product development. It is customer-focused, leads to higher levels of demand and reduces marketing costs. Having used this great vacuum cleaner, I am going to buy one. There is no need to advertise to me. Indeed, I have never seen an advertisement for a Dyson vacuum cleaner. I don’t even need any assistance from a sales representative. I am sold.

I am also sold on the concept that better products drive down marketing costs, and the best products solve problems. In some cases, these will be problems that need to be highlighted to consumers, and in some cases, how the problem is solved will need to be demonstrated – but the fact remains, great products that solve problems will drive down marketing costs.

Despite only being available since 1991, Dyson vacuum cleaners are now number 2 in sales worldwide, behind Hoover – which has been around since the 1950s and has a name that is generic to the process of vacuuming. In the last three years, Dyson vacuum cleaner sales increased by 300%.

The key to the success of Dyson vacuum cleaners must include the fact that the manufacturer has been so successful at identifying and solving problems.

INSIGHT – Understand your consumer so well that you can identify their problems. Use that understanding to solve problems and be seen as a problem solver. 

  1. To maximise conversion rates – engage the prospect emotionally.

There is an increasing tendency for consumers when making a significant purchase, to undertake research. A recent study found that 82% of consumers read relevant online content when making a significant purchase.

Being the source of that content can be very helpful in increasing the awareness and perception of your brand. It can also be a useful strategy for engaging the potential customer early in and throughout the purchasing process.

With significant purchasers, it is understandable that consumers will seek information that will help them make the right decision for them. This is especially so where the purchase is a complex process or the item being purchased is complex. It is especially so with the initial purchase of a significant product or where models have been substantially updated.

In these circumstances, consumers seek an understanding of relevant facts and providing those facts can enhance your brand image and encourage the purchase of your offering. This is especially so, where:

  • You are already considered an authority
  • The content is indeed informative and helpful
  • The content is objective and does not actively sell

The engagement of the prospect is particularly important where the purchase happens over an extended period, and the purchase options are many. The right content can be very engaging, especially if it:

  • Appeals to the emotions as well as the intellect
  • Utilises video and or interactive components

Most content aims to inform, appealing to the intellect. To engage, however, content should also have an emotional appeal. Emotionally charged content might be less informative, but it is more engaging.

Video is by far the most popular medium for content in 2019. Video is engaging. Also engaging is interactive content that calls for input from the potential purchaser.

INSIGHT – Ensure that the content that you use addressed both the intellect and the emotions. Engaging the potential customer is more about emotions than intellect. 


Central to maximising the performance of any business is maximising the lifetime value of each enquiry. Maximising the lifetime value of each enquiry maximises the return on the promotion associated with generating each enquiry. It drives revenue up and marketing costs down. Central to maximising the lifetime value of each enquiry is maximising conversion rates, margins, the average sales per customer, repeat business rates and referral rates.

Here are five tips for – maximising the average sale per customer in 2021.

  1. To Maximise the average sale – think strategically about your product.

I cannot recall reading a marketing strategy, and I have read hundreds that directly addresses the average sale per customer or, more importantly, strategies for maximising that average sale.

Does your strategy directly address how you intend to maximise the average sale per customer and, therefore, the return on your investment in marketing? If not, why not?

Once you have invested enough to get the customer to the point of wanting to make a purchase, it surely makes sense to have strategies that will ensure you leverage your value proposition to extract as much revenue as possible from the customer and maximise satisfaction in the process.

Few things are more important in maximising both the number and size of sales than your value proposition. Your value proposition is, in essence – a summary of what you deliver that is unique and what sets you apart from your competitor.

When I meet a potential client for the first time – I generally ask – ‘why should I buy your product instead of those sold by…… (major competitors)’. You might be surprised just how rarely these potential clients can provide a meaningful, sustainable, and credible answer to this question.

Of course, to answer this question, you would need to understand not just your product but also the competitive environment. You would need to be able to identify the unique qualities of your product and those of your competitors – and in my experience, few can do this.

Research conducted in the US in 2018 suggested that 40% of businesses surveyed undertook at least annual competitor research. My experience suggests that this figure is closer to 10% in Australia.

Australian businesses tend to have a lower commitment to research – both formal and informal.

Another study in the US found that only 45% of businesses surveyed targeted a specific value proposition to a particular market. Again, my experience suggests that it would be closer to 10& in Australia.

Australian businesses tend to take a less methodical approach to market segmentation and targeted value propositions.

INSIGHT – Research the segment to serve and use the data to identify your value proposition. Highlight the unique characteristics of your product in each segment.

  1. To maximise the average sale – ensure sales staff know-how.

How often have you walked into a store, made a purchase and just walked out without the salesperson making related purchase suggestions? How frequently have you visited a website, made a purchase and not had a related purchase suggested to you?

Not only is this a problem in terms of not maximising revenue, but it can also be an issue in terms of maximising customer satisfaction and, therefore, the likelihood of repeat purchases and referrals.

I know nothing about hardware, but I like to pretend to be a skilled handyman when on the farm, where no one is watching. Hence, I occasionally find myself in a hardware store buying things I hardly understand. Then I find myself back at the farm with most (but not all) of the things I needed to complete the job at hand. Every time, I think – ‘why did the salesperson not ask me if I also needed …..’? Then I drive 20 kilometres back to the hardware store.

If the sales representative of counter staff had asked me what task I was about to undertake and suggest the other things I might need, the hardware store would be richer, and I would be happier.

Few salespeople, especially in a retail environment, work actively to maximise the average sale per customer, despite the business’s investment in getting the customer into the store.

And asking, ‘is there anything else I can help you with today’ does not mean increasing the average sales per customer. It is a sales patter that most customers do not even hear because it is said in a way that lacks enthusiasm and sincerity.

Increasing the average sale per customer involves understanding exactly what the customer is trying to do with their purchase, possibly by asking them and then structuring the sales process not around the transaction but around the customer’s needs. Indeed, maximising the average sales per customer is not so much about selling. It is about putting the customer at the centre of the process and ensuring that they are as happy as possible when they leave the business and beyond.

In my experience, most sales staff view the customer as a hurdle in the day’s proceedings – a hurdle that needs to be addressed as quickly and efficiently as possible. But this is surely not all the salesperson’s fault. A recent study found that 80% of sales staff rated appropriate sales training as central to their performance. I agree with them.

Seven reasons cited for the failure of sales training:

  • Failure to define learning needs.
  • Failure to build sales knowledge
  • Failure to access individual attributes.
  • Failure to implement methodology.
  • Failure to provide training that engages.
  • Failure to reinforce training.
  • Failure to evaluate continuous improvement.

This raises questions about the approach to sales training and the emphasis on the skills required to maximise the average sales per customer. I am also given to wonder about the incentives for sales staff to maximise the average sale per customer.

INSIGHT – Have in place the staff, training and incentives required to capitalise fully on each enquiry that comes to your business. 

  1. To maximise the average sale – look past the deal. 

When you have a customer in your office, at your counter, on your website or at the end of your direct mailer, surely the size of the transaction is a critical consideration. Closing the deal is important, but so is the size of the deal you close.

Despite this, I have seen very few marketing strategies that address the average sale per customer. While I have seen many sales strategies that focus on closing the deal, I have seen far fewer that directly and strategically address, maximising the average sale per customer.

A recent US study found that for 71% of salespeople, their priority is closing the deal. On one level, this is as it should be. Without closing the deal there is no sale or revenue. At the same time, focusing on making a sale is wasteful. The focus should be on selling as much as possible and maximising the average sale.

Not only does focusing on the average sale have the potential to increase revenue, research suggests that if addressed with empathy this can also increase customer satisfaction and repeat business and referral rates.

Despite this, most salespeople seem to care little about anything beyond closing a deal. This is, in my experience, particularly so where the is no commission involved, and the salesperson is more concerned about clearing the counter than maximising revenue.

What about your business? What is the focus of your salespeople? After you have invested in attracting the customer to your counter, office, or telephone – how much effort do your salespeople put into maximising the average sales?

While you are doing that, you might like to consider the:

  • Systems you have in place to support the salesperson in this regard.
  • The incentives you are offering to encourage the salesperson to sell up and on.
  • The training you are providing to ensure your salespeople have the required skills.
  • The tools you offer you salespeople that enable cross-selling and selling up.
  • The consideration you have given to bundling and similar techniques.

Most people appreciate the importance of maximising the average sales per customer. However, my experience suggests that they still devote inadequate resources to strategies that ensure sales staff can and will sell up, sell on, cross-sell and bundle products – to maximise the average sale per customer.

For most businesses, it seems to be a matter of hoping and praying – very unreliable strategies given the likelihood that hope is an illusion and God is a figment of our hopeful imagination.

INSIGHT – Ensure that your salespeople understand the importance of the average sale per customer and have the skills and incentives to sell up and on.

  1. To maximise the average sale – think strategically about your marketing.

Many a client has asked me how to attract more customers. I have had fewer, but still, a number ask me how to increase repeat business and referral rates. Alas, I have had very few ask me how to increase the average sale per customer.

This might suggest that they don’t think I know anything about the average sale per customer. It might also indicate that this is a low-level consideration – or, most likely, a consideration that will look after itself. This is a shame given that in my experience, the average sale will not look after itself.

Maximising the average sale requires a strategy that needs to address much more than just sales techniques. A recent study found that 71% of businesses fail to establish a direct link between the qualities of the product and the needs of the customer, reflecting:

  • Inadequate marketing in terms of communicating the right value proposition.
  • Inadequate selling, especially in terms of identifying specific customer needs.

Other studies have variously found that in terms of the average sale:

  • 70% of businesses using social media outperform those who don’t
  • Customers impacted by social media spend about 64% more

This research highlights that maximising the average sale per customer starts well before the sales process begins and involves much more than just the techniques adopted by salespeople.

Critical issues in this regard can include:

  • Bundling
  • Unbundling
  • Product alignment

Maximising the average sale per customer requires that the average sale is top of mind throughout the strategic planning process. Indeed, the average sale per customer can be impacted at each stage of the purchase process. It is most certainly impacted by the approach to and content of:

  • Advertising
  • Social media
  • Reviews
  • Merchandising…… as well as
  • Customer experience
  • Sales techniques
  • Sales incentives

INSIGHT – Prioritise the average sale per customer throughout the strategic planning process. Consider strategies including bundling, unbundling and alignment. 

  1. To maximise the average sale – think strategically about the customer experience.

Questions are always supported by doubt whenever a study finds that people are willing to pay more for something they are paying now or may have paid previously. There is this obsession in the western world, especially Australia, with price, even when the evidence contrary to intuition is compelling.

That said, I could cite a dozen studies where there has been a finding that people will pay more than they have paid previously in specific circumstances. Further, I believe these studies – partially because the results are consistent – but also because the tested variables change the product offering – meaning that instead of paying more for the same thing – people are indicating a preparedness to pay more for a superior product. They are indicating that price is just one variable.

A recent study found that 86% of customers are prepared to pay more for – or given – a superior customer experience. In other words, given the added value of a good customer experience, consumers are prepared to increase their expenditure – driving up the average sale per customer.

However, this same study found that only 1% of these customers indicated that their expectations were being met – suggesting that they will pay less and the average sale will be lower.

Another study found that:

  • 67% of B2C customers are prepared to pay more for a good customer experience
  • 74% of B2B customers are prepared to pay for a good customer experience

Even if these estimates are inflated by 50% or more – it is still apparent that a high number of B2C and B2B customers crave a better customer experience and believe they would spend more in that environment. At the same time, even if a dramatic under-estimate, the previous study suggests that most customers do not believe they are getting a satisfactory customer experience.

Creating a customer experience that meets the expectations of consumers – both B2C and B2B, is central to maximising the average sale per customer. A customer whose expectations are met is more open to spending than customers whose expectations are not met.

That said, creating the optimal customer experience is very difficult if customers are not consulted in creating that customer experience – and in my experience, that understanding rarely exists. Most often, businesses create a customer experience that suits their budget or pre-conceptions of executives in the business – who may or may not be members of the target market – and more often than not lack the customer insights they arrogantly believe they have.

INSIGHT – Create a customer experience that meets or exceeds customer expectations. To do so – look beyond intuition and guesswork. Research can be beneficial.

  1. To maximise the average sale – think strategically about your strategy.

It is perhaps not surprising that 66% of small businesses rate acquiring new customers as their number one priority. However, it is interesting to note that no businesses rated the average sale per customer as the number one priority.

Another study found that 70% of businesses rate revenue as their number one priority, with 60% saying that new customers are the key to increased revenue. No one discussed the average sale per customer.

This is consistent with the Australian obsession with advertising and communication more broadly.

The fact is – attracting new customers is of critical importance, but so are the average sale per customer, repeat business rates and referral (online and offline). Once the customer has been secured, the only way to maximise the return on the investment to date, which is often substantial, is to maximise the average sale per customer and deliver a level of customer satisfaction that maximises repeat business and referral rates.

It is essential to:

  • Know your average sale per customer
  • Monitor your average sale per customer
  • Drive the average sale per customer

The average sale per customer is central to arguably the most important metric in business today – the lifetime value of a customer. Focusing on and driving the average lifetime value of each customer is the key to maximising the return on the investment in advertising and communication more broadly.

Despite this, I cannot recall seeing a strategy that directly addresses the lifetime value of customers, let alone the strategy required to maximise this lifetime value.

In terms of the average sale per customer, this involves maximising:

  • The value of the initial purchase
  • The frequency of purchases
  • The value of ongoing purchases

Furthermore, if the value of the initial sale can be maximised, along with customer satisfaction, it will become easier to maximise the value of ongoing transactions.

INSIGHT – Ensure that your marketing strategy directly places the highest possible importance on the average sale per purchase and purchase frequency. 

 To maximise the average sale – think strategically about your communication.

Maximising the average sale per customer requires listening to customer needs, identifying pain points, and matching needs and pain points to the product’s qualities and value propositions. That said, it is also important to articulate.

Communication is central to every sales process. It is fundamental to maximising the average sale per customer, which, in turn, is a critical element in maximising profitability. Communication involves:

  • Listening
  • Articulating

The importance of listening, often under-recognised, has been addressed in a THOUGHT earlier in this series. The focus here is on articulation.

Over the years, I have undertaken numerous surveys for clients intending to determine how to increase sales. This has included B2B and B2C clients involved in the sale of both goods and services. More often than not, these surveys have highlighted that the clients surveyed and the prospects were not fully aware of the range of goods or services available from the organisation.

The clients were often amazed to find out that their communication with their customers had been such that those customers did not understand the full range of products or services on offer – let alone the value propositions associated with those products or services. The fact is, people tend not to buy what they are not aware of.

Ensuring that customers are aware of all the products and services available is central to maximising the average sale per customer. It is also critical to ensure that they understand the value propositions involved in purchasing these products and the added value associated with purchasing multiple goods or services.

Supporting this, a survey in the United States found that:

  • The most successful salespeople talk for 54%of a sales call
  • The least successful salespeople speak for 42% of the sales call

Explaining the range of products and services on offer is essential.

In the retail environment, merchandising can be an important tool for communicating the goods and services on offer, how they work together, and how they can address customers’ pain points and needs.

The average sale per customer may be further improved by communication that drives an understanding – not just of the goods and services on offer – but of the benefits of buying from the full range available.

INSIGHT – Highlight the added value and benefits associated with purchasing in addition to the core purchase, a more comprehensive range of goods and services.

  1. To maximise the average sale – think strategically about your customers.

There is nothing more important in business than the customer. The customer is the key to profitability. Maximising the average sale per customer can impact that profitability directly.

An important factor impacting the average sale per customer is the experience that surrounds the sale process. Recent research in the United States addressed the factors that affect the quality of the customer experience as identified by customers. The top four factors were:

  • Listening – 69%
  • Not’ pushing’ – 61%
  • Information – 61%
  • Rapid responses – 61%

These findings serve to highlight several critical issues:

  • The importance of understanding the customer and building the sales process around the customer
  • The importance of asking critical questions and providing the information that answers those questions
  • Not being too pushy and helping the client through the sales process rather than trying to push them into a sale
  • Providing the highest possible standard of service – responding quickly and efficiently to all questions and needs

This study highlights the importance of shaping the sales process around the customer in a way that addresses the customer’s needs. Developing an approach to sales that focuses on the customer is central to maximising the average sale per customer.

Research suggests that wherever possible, and to the extent possible, the customer experience and the sales process should be customised and personalised. Listening is undoubtedly a key to being able to tailor the sales process. This also impacts a customer’s feeling of significance and importance – a point addressed in last week’s series on repeat business and referral.

The critical point here is that a customised experience that meets or exceeds customer expectations can significantly impact the average sale per customer. It can create an environment where sales staff can work with customers to maximise the average sale per customer.

INSIGHT – Deliver a customer experience that addresses customers’ expectations by creating an environment that allows the average sale per customer to be maximised.

  1. To maximise the average sale– think strategically about price.

Australian businesses are absolutely addicted to competing on price. It is commonplace to advertise price, to demonstrate a predisposition towards competitive pricing, a propensity for claiming the ‘lowest price’, and a habit of blaming cheaper alternatives when sales are below expectations.

Four things can be said about this obsession with price:

  • Price is important – to no small extent because of the emphasis business puts on it
  • There is no doubt that in some product categories, the lowest price can win
  • Price is rarely the key to increasing margins
  • Lower prices are not always the key to increasing sales

Over the past 12 months, I developed and helped implement two strategies where sales increased when prices increased. This involved repositioning the brand as a well-priced premium product rather than a more expensive mid-range product in both cases.

In both cases, increasing the price (along with some promotional material) changed the brand’s perception. This, in turn, influenced the amount that customers were prepared to pay.

Not surprisingly, this had a direct impact on the average sale per customer and on profitability.

The fact is, price can be used as a tool in judging the perception of the product. Increasing the price, if supported, can, and very often does, impact the perception of a brand.

Valid or not – price can be an indicator of value for many, if not most, consumers.

Additionally, there is a plethora of evidence to suggest that customers are happy to pay more under certain circumstances. One such study in 2018 found that 50% of people aged 40 – 44 are prepared to pay more for brands they believe to be socially responsible. This highlights the fact that some people are ready to pay for added value – and in the case of being perceived as socially responsible, the added value might cost nothing to deliver. Other studies suggest that this applies to the majority of people across the board.

Where a higher price can be justified and presented appropriately (an issue to be discussed at length in an upcoming series on price), it can be used to increase the average sale per customer and margins and overall profitability.

The variable of price is far more complex than many businesspeople realise. Viewing price in the traditional one-dimensional way is not supportive of maximising the average sale per customer.

INSIGHT – Add value, at a cost or no cost, that can help to reposition the brand and your business, and in doing so, attract a higher price and drive up the average sale per customer.

  1. To maximise the average sale – think strategically about human resources.

Maximising the average sale per customer should be a key focus of most marketing strategies. The salespeople who interact with the customer whose sale is maximised are central to increasing the average sale per customer.

Without the right people with the right skills, the right attitude, and the right understanding in sales positions, it is simply not possible to maximise the average sale per customer.

A recent study found that 60% of salespeople believe that they can identify customer pain points and match the value proposition to those pain points. This finding leads me to ask two questions:

What about the other 40%?

To what extent do direct evaluations meet reality?

Suppose 40% of salespeople cannot identify customer pain points and match the value proposition or propositions of the product. In that case, there is little, if any, chance that the average sale per customer will be maximised. If the percentage is higher than 40%, the potential problem is higher.

In terms of maximising the average sale per customer, it is critical to ensure that the:

  • The business has the right salespeople
  • Salespeople understand the pain points of their customers
  • The sales team has the training it needs
  • Salespeople understand the importance of average sales
  • The whole team has an attitude conducive to maximising the average sale per customer

Another research finding of concern relating to sales staff was that:

  • 60% of salespeople do not change a winning strategy once they have found one

This finding suggests that there is a resistance to change among many salespeople. They find a strategy that works and then stick to it – rather than remaining sensitive to a changing environment and remaining open to adapting to that environment and customer expectations.

The importance of training is reinforced by another study that found that sales staff receiving regular training have twice the results of those who do not.

Again, this highlights the need to have the right salespeople with the right attitude, training, and support to maximise the average sales per customer.

INSIGHT – Employ the right salespeople paying particular attention to their attitude. Then provide ongoing training that ensures your staff can address customer pain points.


Central to maximising the performance of any business is maximising the lifetime value of each enquiry. Maximising the lifetime value of each enquiry maximises the return on the promotion associated with generating each enquiry. It drives revenue up and marketing costs down. Central to maximising the lifetime value of each enquiry is maximising conversion rates, margins, the average sales per customer, repeat business rates and referral rates.

Here are five tips for – maximising margins in 2021.

  1. To maximise margins – give customers certainty and uncertainty

This is the first of five thoughts dealing with the core psychological needs of all consumers. Each one of these six needs represents a business opportunity.

This thought deals with certainty and uncertainty.

Every consumer wants the certainty that they will be safe, comfortable, secure, protected and looked after. All consumers want to know that the sun will rise, and their car will start tomorrow morning. They also want to know that when they shop or engage with a business, the customer experience will be to their liking.

Research undertaken in the United States found that 55% of consumers were prepared to pay more for a guaranteed high standard customer experience. These consumers want a good experience. They also want this experience to be consistent and predictable – guaranteed. In a sense, this is the very definition of quality assurance.

Certainty is so important to consumers that 67% reported that one bad experience led to a supplier change.

As important as certainty to many consumers is uncertainty. Uncertainty or variety is all about excitement, surprise, challenge, and difference. Only children tend to want to see the same movie over and over again. Adults want variety, not just in terms of the movie per se, but also in terms of the genre.

It is often said that variety is the spice of life, and this seems to be true for consumers.

Great brands offer certainty in terms of performance, service standards, pricing, and availability. At the same time, they provide variety in terms of models, colours, styles, and innovation.

That said, while most businesses appear to understand the importance of variety, many seem to struggle with the importance of certainty. This is evident every time a shop assistant tells a customer that a standard product is out of stock, or a waitress says the kitchen is closed because the chef is ill, or a mechanic says that your car service will not be completed today, or a library says that all copies of that book are out, or a professional service firm says the relevant partner is out of town today, or you are in a long line at the bank and have no idea when you will be attended to, or your mobile phone is still not working despite just coming out of the workshop.

INSIGHT – All human beings crave certainty. Most human beings crave variety. Deliver both, and you create a product that adds value and may attract a premium.

  1. To maximise margins – help your customers to grow.

Human beings have an innate need for and actively seek personal growth.

Not every human being wants to be a millionaire, an Olympic gold medallist or a Nobel Prize winner. However, research suggests that almost every human being wants to be more today than they were yesterday. Most human beings want to be richer today than yesterday, more informed today than yesterday, faster today than yesterday, or happier today than yesterday.

Each human being has their own motivators, a unique combination of issues that impact their happiness and state of mind. Still, the one thing they all have in common is a desire to move forward continually. Most human beings want to know that they are making progress.

A survey in the United States found that 76% of employees wanted to progress in their careers. For some, that meant promotion. For others, it meant more money. It meant getting better at the job, and for others, it meant learning things at work that would move them forward outside of work.

This same study found that among Millennials, 87% placed a very high priority on career advancement. This suggests that the importance placed on moving forward or making progress may vary by generation or according to age and stage in the human life cycle. The fact remains, however, that growth is important to most human beings.

Helping consumers move forward, make progress, and become better today than yesterday, is an important consideration and a potential differentiator for most businesses.

INSIGHT – Leverage the human need to be more today than yesterday and more tomorrow than today – the need to be continually moving forward. 

  1. To maximise margins – help develop connections.

This is the fourth of five thoughts dealing with the core psychological needs of all consumers. Each one of these six needs represents a business opportunity.

This thought addresses the critical issue of connection.

It is interesting to consider the three most important factors in determining life expectancy in 2018. The third most important factor is genetics. The second most important factor is environment (including health-related factors such as smoking). However, the most important factor is human connection.

Put simply, people with friends live longer.

The issue of connection is becoming increasingly important as more and more Australians find themselves living alone. In 2018, some 30% of Australians live with no one else in the home. This, in turn, has contributed to the growth in social media and the coffee culture in Australia.

That said, Professor Dunbar discovered in his research that the median number of ‘friends’ people actually communicate with on Facebook is 4. Perhaps social media is not such a great connector after all.

Brand research completed in the United States found that 65% of people engage with a brand when they have an emotional connection. This is a well-established finding. What is less recognised is the importance of personal connections. People want and need to connect. They also want to connect with the people they buy from.

Human beings want to belong, to be a part of a tribe or community with which they have an affinity and can engage with. Providing this opportunity is a potential differentiator for most businesses.

INSIGHT – Address the human desire for connection. Create the potential for your customers to connect with others.

  1. To maximise margins – help consumers make a contribution.

This is the fourth of five thoughts dealing with the core psychological needs of all consumers. Each one of these six needs represents a business opportunity.

This thought addresses the need we all have to make a difference and contribute.

Bill Gates once noted that he enjoys giving his money away so much more than he enjoyed making it. By some accounts, his friend Warren Buffet, also one of the world’s richest men, has agreed to give all of his wealth to the Gates Foundation. Many other wealthy people are heavily involved in philanthropy.

Certainly, recognition might be one of the reasons for philanthropy. Research suggests, however, that the motivation is much more than this. Human beings, by nature, enjoying giving, making a contribution, and leaving their world a better place.

The need to give, contribute, and make a difference, is not unique to wealthy people. Indeed, research suggests that it is a basic need of most human beings. In 2016, some 14.9 million Australians donated $12.5 billion to charities in Australia. This is a large number but will almost certainly pale into insignificance when compared with the hours that community members contribute to charities, community groups, clubs, parents and citizens associations – and various other community-based organisations. To this must also be added the time spent caring for the aged, disabled, and disadvantaged individuals.

While the nature of the contribution and the way it is made varies from individual to individual, most human beings want to make some kind of contribution. Further, research shows that consumers want to support businesses that share their values in terms of contributing and can demonstrate that they are good corporate citizens.

There is a real opportunity for businesses to make a contribution to the community and be seen to make. There is an even bigger opportunity for businesses to help their customers to make a contribution. This is demonstrated in the use of Telethons by Channel 7. It is also evidenced by retail businesses offering to allocate a percentage of every purchase to charity.

INSIGHT – Help customers feel that they are contributing – directly or indirectly – to their community, if not to the broader community. 

  1. To maximise margins – make your customers feel important.

For sane human beings who embrace science – the universe has been here for 13.8 billion years, the earth has been here for 4.5 billion years, there are around 8 billion people on the planet in 2020, and over the last 200,000 years, some 107 billion people have walked this planet. In 2020 there are 2100 billionaires on earth, 39,400,000 Wikipedia personal profiles and 195 world leaders. Alexander the Great had conquered the known world by 32, Napoleon had conquered Europe by the age of 32, and Michael Collins had freed Ireland by the age of 31. In the face of all of this, and more it is not surprising that in 2020 human beings crave significance.

Most human beings are repelled by the idea that they are of no particular significance or that they are unworthy of significance. Most human beings are repelled by the notion that they are little more than a number – or in the case of a Myer shopper – nothing more than a ‘credit card courier’. Indeed, research suggests that in an increasing number of commercial interactions, consumers feel that they are little more than a number or a ‘credit card courier’. Most human beings want to feel that they are important (at least a little) and valued and respected in the commercial environment.

As such, making customers feel significant can be a very powerful marketing strategy – and it need not cost much at all. Indeed, the only cost might be that related to training staff and creating a culture that values the individual. Making customers feel significant and, more importantly, making them feel like a valued customer is facilitated by:

  • Asking questions and demonstrating listening
  • Looking them in the eye and introducing yourself
  • Calling them by name wherever possible
  • Saying thank you
  • Remembering who they are and what they like

The venues I visit to eat or drink and businesses I buy from where – they remember me, call me by name, always say thank you and show genuine interest in me. With these businesses, I feel a connection and a sense of loyalty. Unlike the case with Myer – I will keep on going back – and I am not alone. I am sure you are no different – and it is not politeness you are responding to but rather – a feeling that they value your custom.

We like to hear our name because it makes us feel significant. We do not like feeling like a credit card courier because it makes us feel insignificant.

INSIGHT – Create in your business a culture where customers are valued and where making customers feel significant is a priority.


Central to maximising the performance of any business is maximising the lifetime value of each enquiry. Maximising the lifetime value of each enquiry maximises the return on the promotion associated with generating each enquiry. It drives revenue up and marketing costs down. Central to maximising the lifetime value of each enquiry is maximising – conversion rates, margins, the average sales per customer, repeat business rates and referral rates.

Here are five tips for – maximising repeat business rates in 2021.

  1. To maximise repeat business rates – develop and leverage relationships.

Research completed in 2018 found that 84% of B2B relationships start with a referral. This serves to highlight the importance of referrals – especially in the B2B environment.

Another study found that 91% of customers say they’d give referrals; only 11% of salespeople ask for referrals. This points to the failure of salespeople to leverage referrals.

Another study found that some 77% of businesses do not think they are fully leveraging the potential of their customers. This points to a lower potential to drive repeat business and referral.

Central to maximising referrals is establishing a strong relationship between the purchaser, business, and relevant personnel. Relationships can help overcome the failure of sales staff to leverage existing customers fully. Relationships drive repeat business and referrals.

In driving repeat business and referrals, few things are more important than the relationship developed with the customer. Central to creating and maintaining a strong relationship with clients are:

  • Commitment
  • Communication
  • Community

It is important to demonstrate to customers that the business and key staff care about them and are committed to ensuring the delivery of all promised outcomes. This involves following up on the purchase to ensure all is well, responding promptly to customer questions and queries, and providing excellent after-sales service. Getting what is paid for is essential to repeat or referral.

Communication might start with saying thank you, but communication also involves listening and learning. Securing feedback from the customer helps fine-tune the customer experience. It is also important to identify future needs and simply ensure that the customer knows you are listening.

Brand communities are becoming increasingly common around the world. Some 61% of corporates in the United States now report having or being in the process of building a brand community. Brand communities and online communities, in general, can facilitate relationships, not just with customers but also between customers – enabling customers to reinforce each other.

Enabling the development of relationships requires:

  • Technology
  • Expertise
  • Awareness

Customer Relationship Management technology can be beneficial indeed, as can community platforms that facilitate the development of brand communities. It is important that the staff have the skills to develop relationships and an awareness of the importance of relationships. Relationships are ultimately between individuals.

INSIGHT – Prioritise relationships with customers – developing a commitment to customer outcomes and developing a community.

  1. To maximise repeat business rates – make it easy to repeat purchases.

Research completed in 2018 reported that a referred customer is worth some 16 times more – in terms of lifetime value – than a customer-generated by way of promotion. Another study with a similar vintage found that a referred customer is four times more likely to purchase than a customer-generated by way of advertising.

If there were ever two reasons to devote resources away from promotion and actively driving referral, these are them. It begs the question – why are there advertising agencies all over – but few, if any, referral agencies? A business opportunity? Maybe.

With this in mind, it seems important, or at least a significant opportunity, to make it as easy for satisfied customers to refer. You might think they should make an effort to refer, but they are unlikely to. It has to be easy, and the has to be a rationale.

In this regard, there is considerable merit in:

  • Give customers the information to refer
  • Provide an accessible referral avenue
  • Highlight incentive programmes
  • Introduce them to your community
  • Ask and provide a medium

Many purchases are more emotional than cognitive. It is, therefore, often helpful to provide after the purchase that facts that will enable rationalisation of the purchase and provide information that can be passed on to potential referees.

If you have a referral system online, or indeed if the sale occurs online, direct the customer and ask for a referral, or at the very least a positive review. While not as potent as a face-to-face personal referral, reviews have been found in research to be a major driver of referral business.

Remember – CLICK HERE TO TELL YOUR FRIENDS….. and you could win…….

If you have a referral or loyalty programme, don’t wait for your customers to find out about it – tell them all about it and encourage them to refer and access the rewards. Talk to your customer.

There is real merit in establishing a brand community. There are few new tools in terms of their effectiveness in driving referral and repeat business than a brand community. That is why some 61% of US corporates now report having a brand community or developing one.

Don’t leave it to the customer to find your online community – tell them all about it and how to see it, along with detail on why they should get involved with the community.

There is also every reason to ask the satisfied customer if they have friends who might be interested and give them a card or brochure to hand on to friends and details on incentives available to the referrer or referee.

INSIGHT – Talk to your customers before the sale and after the sale. Provide them with the information, incentives and resources needed to refer. 

  1. To maximise repeat business rates – show that you care.

I have written a lot about the importance to consumers of feeling significant. No matter how ‘unimportant an individual might seem, and no matter how little they spend, everyone wants to think that they have significance in the world. Along with certainty, variety, connection, growth and contributing, significance is one of 6 key drivers of 21st-century consumer behaviour.

Further, when a consumer feels they are significant, they are far more likely to repeat an action. If a business makes them feel important or at least significant, consumers are far more likely to buy again or refer. They are far more likely to have a higher lifetime value.

Part of making a customer feel significant is demonstrating that you care.

This is highlighted in recent research reporting that 68% of customers have changed supplier or vendor due to a perception that the supplier or vendor did not care enough.

Caring is important, but it is not enough.

The truth is, many of the businesses that were dumped by those surveyed may well have cared a great deal, but the customer was still left with the impression that they did not care enough.

To maximise the lifetime value of a customer, it is important to care and demonstrate your care.

Demonstrating to customers that you care might involve:

  • Being present – at the moment with the customer (not daydreaming or thinking of home)
  • Asking the right questions and listening carefully to the customer
  • Personalising the pitch and customising your conversation accordingly
  • Being respectful, introducing yourself, using names and being generally polite
  • Reflecting a positive and engaged attitude to the transaction, no matter how small
  • Remembering repeat customers, their idiosyncrasies, tastes and preferences
  • Following up customers after the purchase and asking them how they feel

Demonstrating with a smile, that nothing is too hard.

The list goes on. There is a great deal you can you to demonstrate that you care – and it is vital that you do it with sincerity and authenticity. A documented process for showing caring as part of your overall lifetime value strategy is essential.

Above all else – CARE. If you genuinely care about every customer, your repeat business and referral rates will rise.

Research also suggests that a small purchase today can lead to a more significant purchase down the track.

INSIGHT – Develop and implement processes that ensure that you and your staff demonstrate to every customer that you care.

  1. To maximise repeat business rates – deliver everything you promised.

The feeling of being ‘short-changed’ is not a good one. It is certainly not conducive to maximising the lifetime value of a customer by way of repeat sales or referrals.

The fact is, ‘short-changing’ (on the product delivered rather than cash) is all too common. In my experience, businesses delivering on all that they promise are the exception rather than the rule.

This is perplexing given that research indicates that 67% of people have changed supplier or vendor on the basis that they felt the supplier or vendor did not deliver as promised.

Delivering as promised is not just about value for money. It is also about credibility. As such, it increased the tendency to buy again and the propensity to believe future promises.

A couple of years ago, Myer’s ‘Christmas slogan’ was the word – ‘Wonderful’. As it happens, I did make a purchase at Myer that year. While I was happy enough with the purchase, nothing about the purchase or the purchase process was anything close to ‘wonderful’. It was a case of promising the world and delivering an atlas.

I take two lessons from this experience.

Firstly, to deliver as promised – do not raise expectations too high or above your capacity to deliver. Secondly, delivering on the promise involves much more than the actual product. It also includes the:

  • Quality of the customer experience.
  • Level of customer engagement.
  • Standard of after-sales service.

Indeed, maximising repeat business and referral rates requires delivering all promises – articulated and implied, legal and moral. It is important to:

  • Be cognizant of customer expectations.
  • Follow up customers to gauge satisfaction levels.

Customer expectations tell you what the customers think the promises are. In practical terms, they are what the customer says they are.

The extent to which customer expectations are being met and how your business is seen as delivering on its promises needs to be closely monitored.

INSIGHTS – Research to understand customer expectations, the promises they think you are making, and the extent to which you are seen to be delivering. 

  1. To maximise repeat business rates – be remarkable.

There is a fun little book called Purple Cow, written by Seth Godin. The premise of the book is summarised in the following tale.

You and your family are travelling through the countryside, and you see a brown cow in a paddock. Do you tell the family? Of course not. They have seen many a brown cow. Then you see a black cow – and again, you don’t tell the family. Black cows are ubiquitous. Then you see a bright purple cow. Do you tell the family? Of course, you do because a purple cow is remarkable.

In a speech on this same topic, Godin suggested that – ‘nobody recommends a mediocre restaurant’. The inference here is that while we might go to a mediocre restaurant once or twice because it is cheap, or even regularly if we have limited options – we would not recommend it. While perhaps adequate and unlikely to be closed by the health department, a mediocre restaurant is not remarkable enough to recommend or even revisit.

The fact is, we are attracted to the remarkable. We are far more likely to recommend a business that has provided a remarkable or extraordinary experience, one worth talking about.

Recent research found that 92% of people surveyed responded positively to recommendations or referrals from friends.

The potential for recommendations is remarkable – but will only be maximised if the product and or experience of purchasing are also remarkable.

Another recent study found that 42% of businesses surveyed believed that enhancing the customer experience would directly impact repeat business rates. A further 33% suggested it would affect customer satisfaction.

It is not just the product that can, and should, be remarkable. Ideally, the whole customer experience and the entire process of purchasing should be remarkable. Further, smart businesses devote resources to identifying opportunities for making as many aspects of the purchase experience as remarkable as possible.

The remarkable aspects of the shopping experience must be relevant to the customers’ needs, wants, and expectations. Indeed, the remarkable aspects of the process must be customised to the primary target market. This may alienate other markets, but that invariably happens with effective marketing.

Shopping at IKEA is a remarkable experience. It is an experience that alienates me more than I could articulate – as does the IKEA product. This would not bother the marketing team at IKEA one little bit as they would not consider me part of their target market. Their target market loves IKEA and, as a result, return time and again, and proudly show off their purchases to friends.

INSIGHT – Rise above mediocrity. Look at every aspect of your product, the customer experience, and the process in general and make it as remarkable as possible.

  1. Maximise referral rates – get your service right to drive repeats and referrals.

The fact that Australia does not have a service culture is both obvious and damaging. Most businesses in Australia offer average business at best, and most retailers in Australia offer little or no service. Most retailers providing high-quality service are international businesses, and the situation is much the same for business in general.

Good service is so rare in Australia that when it is experienced, it is talked about for weeks, if not months. The excuses offered by businesses for not offering good service, including concerns about the cost of training staff who might leave, are both amazing and self-serving. I love the saying – ‘it is better to train staff that will leave than not train staff that will stay.’

Research by Accenture in the United States found that 66% of customers switch brands and, as such, neither repeat purchases nor refer because of bad service. Further:

  • Zendesk found that 40% of customers swap brands to one with a reputation for service
  • Accenture found that 82% of switching customers say the business could have taken action to prevent the switch
  • Zendesk found that some 82% of customers stopped doing business with a brand due to poor customer service

Bad service can manifest itself in many ways – not appreciating the customers, being unhelpful, too many points of contact, poor staff knowledge, lack of responsiveness. Most Australians experience one or more of these manifestations of poor service weekly, if not daily.

Seth Godin once said – ‘nobody recommends a mediocre restaurant’. Avoiding bad service is not enough. If a business wants to drive repeat business and referral, it must offer great service, memorable service, the type of service that its customers want and engage with.

INSIGHT – Ensure your service is at a standard and has been customised in a way that will maximise referral rates. Consumers talk about good service.

  1. Maximise referral rates – create evangelists.

There are few people I try harder to avoid than religious, sporting, or political evangelists. Being sold on a God I will never believe in, a sporting team I will never care about, or a political grouping I don’t respect is monumentally alienating.

In business, few things are more important than an evangelist, and there is much to gain from having customers who are not just happy and repeat purchasing – but also singing the praises of the business – just like an American born-again Christian on television on a Sunday.

A recent study found that 83% of customers are willing the make a referral, but only 29% actually do. That is, while 83% of people have had an experience that warrants a referral, less than 30% follow through.

To quote the late, great Julius Sumner-Miller – why is this so?

It might be that some customers do not have an opportunity to refer. However, research suggests that the most critical issue is that customers don’t get around to it, don’t think about it, or simply forget. This highlights the potential impact of strategies designed to encourage the 83% to refer.

Research points to the importance of a referral marketing programme involving one or more of a range of tactics, including:

  • Giving cash rewards to referrers.
  • Offering discounts on future purchasers for referrals.
  • Enabling referrers to look good by offering referees a special offer.
  • Rewarding referrals with a contribution to causes customer’s support.
  • Incentivising referrers or rewarding referees in some other way.

There is also the growing potential to develop a brand community or tribe, which, in addition to rewarding and reminding referrers, offers another point of initial engagement for referees.

Some 61% of corporates in the United States have established or are in the process of building a brand community, a tribe, with shared values and a common interest in the brand. These customers will become repeat purchases and active referrers to both the brand and the community.

In this regard, it is worth reading Tribes by Seth Godin. Given effective leadership, shared values and effective ongoing communication, brand communities can drive repeat business and referral.

INSIGHT – Understand that most people who can refer don’t – no matter how good the experience. Develop a brand community or tribe with shared values. 

  1. Maximise referral rates – focus on the lifetime value.

View each customer not as a transaction but as a life-long stream of income. Certainly, this principle is less important in some industries (perhaps tourism), but it is very important indeed in most industries – goods and services alike. Consider a recent study across industries that found:

  • The probability of selling to an existing customer is 60 – 70%.
  • The probability of selling to a new customer is 5 – 20%.
  • 80%of future profits come from just 20% of existing customers.

Existing customers, or ‘retained customers’, are an excellent source of business. What is your strategy for maximising repeat business and therefore maximising the lifetime value of your customer – that is, maximising the lifetime return on your initial investment that got the customer into your business for the first time.

If you say that your strategy centres around – ‘offering a quality product’, ‘providing good service’, ‘ensuring good value for money” – I would argue that it is not enough. Maximising the lifetime value of a customer involves establishing a strong relationship with that customer, which in turn involves:

  • Providing a remarkable customer experience
  • Delivering above customer expectations
  • Proving avenues for developing a relationship
  • Providing information and educating.
  • Delivering excellent value for money.

The customer experience has to exceed good and be memorable. Understanding the customer enough to be able to identify and exceed their expectations is essential. Maintaining contact through social media, newsletters, phone calls, or other follow-ups is important. An informed and educated customer will invariably buy more and do so more often. One study I completed cast doubt on how much most customers know about a business’s range of products or services.

Remembering that it is the customer who determines and estimates value for money is also essential.

The customer needs to be the focus. Look after the customer in an exceptional way, and they will look after you.

INSIGHT – View all customers as a lifelong source of revenue. Implement a life-long relationship arrangement with all customers. Provide the customer experience customers will come back for.

  1. Maximise referral rates – reinforce emotional decisions.

A recent study found that 52% of businesses cite repeat business as the primary driver of profitability. In the same study, only 45% of businesses cited new customers as the primary driver of profitability.

Repeat business (and indeed, referrals) are not just an important source of revenue for many businesses. It is an even more significant driver of profitability, given the potentially lower customer acquisition cost and higher average spend – as noted in earlier THOUGHTS in this series.

A proven strategy for encouraging repeat business and referral involves thanking customers for each purchase and reinforcing their purchase decision.

A ‘thank you’ at the point of purchase is important but often not enough. With significant purchases, it is often prudent for a senior team member to contact the customer directly and thank them for their business.

This contact can also provide a valuable opportunity to investigate the customer’s experiences and gather data to help finetune the customer experience and identify opportunities for repeat business and referrals. Surveying customers in this way demonstrates to them that they matter and that their business is valued. It can also provide an opportunity to drive future conversion, referral, and repeat business rates.

Many businesses, including BMW, also use customer contact after the purchase to reinforce the purchase to help ensure that the customer feels good about the purchase and provides reasons for repeat purchases and referrals.

BMW reinforce their customer’s purchase, providing facts that support the merits of that decision. Is so doing BMW:

  • Ensure the purchaser feels as good as possible about the purchase they made.
  • Provide the purchaser with the facts to be used to support an emotional decision.

A customer who feels good about their purchase will be more likely to refer and repeat purchases.

Given that many purchases, including the purchase of expensive luxury motor vehicles, are primarily emotional, providing the facts after the purchase helps the purchaser rationalise the purchase in their own mind and to others – again enhancing satisfaction and the likelihood of referral.

INSIGHT – Thank your customers for the purchases. Ask questions that can enable you to finetune the purchase process. Help purchasers rationalise their purchases.    

  1. Maximise referral rates – place a higher priority on driving referral.

Nielsen research in the United States found that people are four times more likely to buy when referred by a friend. This is an important statistic, given research showing that word of mouth is a more important driver of business in 2017 than advertising or history.

Nielsen research also found that 92% of respondents trust referrals from people they knew. This is also a significant statistic given the importance of credibility and trust in business in 2017. There is a great deal of potential in driving referrals.

It is also interesting to note research undertaken at Texas Tech University, which found that 83% of customers are willing to refer based on a positive experience, but only 29% do so. Something is going wrong here.

So, how do you address the issue of referrals? Here are three insights:

  • Only 30%of businesses surveyed in the US have a formal referral programme.
  • Only 22% of businesses surveyed in the US have referral tools in place.
  • Non-cash incentives are 24% more effective than cash incentives.

Very few businesses I come across have a formal referral strategy, most are not even aware on a strategic level of the importance of referral tools, and business in this country retains an obsession with cash incentives.

INSIGHT – Document a referral generation strategy and incorporate it into your overall marketing strategy – developing and leveraging trust.

In addition to being cheaper to attract, referred customers tend to convert easier and spend more. There is arguably no better business than referral business – so having a documented strategy to facilitate referral makes a great deal of sense.


Attracting new customers is expensive and difficult. It is therefore important to maximise the return on each enquiry generated. It is essential for every business to incorporate into its marketing strategy – strategies for maximising – conversion rates, the average sale per customer, margins, repeat business rates and referral rates.

A focus on maximising the lifetime value of every enquiry and customer is central to maximising the performance of every organisation. Marketing is about a great deal more that attracting new enqu

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Five Tips For Reducing
The Cost Of Branding.

Burning money on branding is more common than most marketers think. Because few businesses truly understand what a brand is and how branding works, advertising agencies, branding agencies and design studios have become expert at spending their client’s money without effective accountability.

Burning money on branding is more common than most marketers think. Because few businesses truly understand what a brand is and how branding works, advertising agencies, branding agencies and design studios have become expert at spending their client’s money without effective accountability.

1. Get out of the boardroom.

Perhaps the two most concerning issues about branding are the lack of understanding about what brand and branding are and the propensity to develop brands in the boardroom, perhaps with the help of a consultant.....