The following article is part 3 in a 5-part series on how to boost business cash flow.
Does your business need a quick boost of cash?
I know this is probably a silly question. Of course your business needs cash. Frankly, when doesn’t it need cash.
One great cash flow strategy that’s relatively cheap and easy to implement is to win back past customers that haven’t bought from you for a while. The cost of getting sales from an existing customer is much less than that of acquiring new customers. In fact, new customers are your most expensive customers.
Now is the perfect time to review your past and existing customer lists. There are bound to be some people who haven’t bought from you in a while but will again with the right offer and a nudge. Reaching out to them should be as easy as sending an email, picking up the phone, or even sending them a card via postal service — assuming you’ve kept your database up to date over the years.
What’s Your Cash Flow Strategy?
Start by clarifying the reasons why you need a cash boost and exactly how much you need — are you trying to cover your own salary, payroll for your employees, a redesign for your website, new WFH tech? This will help you to design the right offer and make sure it will meet your needs.
Factor in how many sales you need to make — when you look at the list size of your past and existing customers, how realistic is your goal? Typically, past customers will convert to a sale at a higher percentage than cold prospects but if your lists are small, this may be just one strategy you have to take to boost your cash flow.
By considering the reasons for your cash deficiency, you might find some areas in your business you can tighten up to save money and prevent this from happening in the future. (See Part 2 of our series for ways you can save money in your business).
Know Your Audience
If you have customers who haven’t bought from you in a while, why is this? It could just be that you haven’t contacted them in awhile — out of sight, out of mind is an easy problem to solve if you’re willing to send some emails and get on the phone.
Or they may be buying from a competitor of yours. Don’t despair if this is the case becausee you haven’t lost them yet. During times like these, people are looking for bargains and they’re looking for added value. How can you add value to your customers and win them back?
This is also an important consideration for your current customers — how can you provide added value so they don’t abandon you for competitors offering bargains?
It’s important to think through these considerations so you can make the right offer to get them back. If they still need your products but just haven’t purchased in a while, it won’t take much to remind them you’re still there offering the same quality.
But if there are market reasons such as competition or changing needs, you’ll have to dig deeper and make an offer that will satisfy them in their present situation. This could be a reduced price, a limited-time flash sale, a bundle of products, or a new service.
Make Your Offer
There are many types of offers you can make to past customers. One that works well is a loyalty program that says “thank you” for staying with you.
Another idea is to create a sale and tie it to some holiday or special occasion. Look for national holidays where your target market lives, or create an occasion to celebrate, such as a birthday or anniversary.
Consider adding a new service to a regular product. If your market research reveals that they’re going to someone else because of a service the competitor offers, offer your own version of it.
A great additional service to offer is an educational experience. Along with the purchase, offer free one-on-one coaching or a webinar. It can teach the customer how to use the product or address any related problems they’re facing.
Now is the time to add value to all of your customers. It will help you maintain your current cash flow and it can help you boost your cash flow by re-engaging past customers so they make new purchases.