Have you ever noticed how cell phone companies always seem to offer the best deals to new customers? To customers that switch from other carriers? How you, as a loyal customer only get ho-hum deals on upgrading a phone or changing your plan?
Another one I love is when you’ve been a customer of a company for a while, you call to cancel and they transfer you to “customer retention” where they offer you a deal at half the rate you’ve been paying. Why didn’t you offer me a better rate before?
How does this make you feel as a customer?
In many business and marketing classes, you are taught how to find new customers – a necessary and worthy endeavor. The trick is to balance the quest for new blood in your practice with honoring those who have been with you all the while.
The Cost of a New Client
What many people don’t realize is that gaining new customers costs money. If not money, it costs time; but as the old saying goes, time is money. So just how much money does gaining a client cost you?
Well first you have to determine how much money you are spending on your marketing efforts. Tally up what you spend on business cards, mailers, maintaining your website, open houses, charity functions, etc… so you have a dollar amount. The next part is a little harder – figuring out the intangible costs.
To figure out the intangibles, ask yourself, “Are any of my promotional efforts costing me money in time or potential lost business”? If your time is plentiful, this may not really be a cost. But if it isn’t, you might be “spending” money that way. Also factor in things like transportation, refreshments and any other costs direct or indirect.
Let’s take an example (numbers entirely fabricated) by evaluating all you spend on marketing broken up by category. Then, you have to keep track of how many clients you get from each source. And finally you divide to see how much each new client costs you…
| Biz Cards | $25 | 5 clients | $5 each |
| Paper Ad | $150 | 3 clients | $50 each |
| Online | $50 | 2 clients | $25 each |
| Health Fair | $400 | 8 clients | $50 each |
| Mailer | $100 | 5 clients | $20 each |
| Totals | $725 | 23 new clients | $31.52 average |
What this does is allow you to see how effective each effort is. In this example, our imaginary MT spent $31.52 to gain each new client. New clients are expensive! But wait, there’s more! If you give an introductory discount, it can be even more.
Say your normal rate is $70 per hour. If you give a $20 new client discount on top of that then those clients from the newspaper ad and the health fair were given a free massage. You’d better make sure they come back! The business cards were more efficient, but during this time frame their appointment was still given for:
$70-31.52-20 = $13.48
New clients are vital to any business, growing or established, but don’t lose sight of the big picture and focus all of your efforts here. Not many of us can afford to do all of our work for $13 an hour. It can be an eye opening experience to find out exactly how much we can spend to get those clients in the door. The added bonus to this strategy is that it can really help us focus on our most successful and efficient marketing efforts.
Repeat Clients Are Golden
Now that we’ve seen the sticker shock of how much new clients can cost, how much do returning clients cost?
Nada.
Quite often a client will come back with a simple “would you like to book your next session now?”? Don’t miss this opportunity to ask the client to come back. Show your appreciation for their business and to let them know how much you genuinely value them. Gratitude can go a long way.
Going back to the cell phone company example from the start of this post, why don’t you go a step further and offer a VIP program, a “frequent flier” type program, or a discount for booking a massage at least once a month?
If you look back to working with new clients, you have to look at your conversion rate – how many of those new clients come back for another massage? And another? Personally, unless there is a major clash of personalities, I consider it a problem with my service if a client wouldn’t come back for another session. I use that as an opportunity to evaluate if I could do something better. Of course there could be any number of reasons why a client doesn’t return, so find out what those reasons are! You can’t do anything about it if you don’t know!
Invite those clients back, entice them for more, and as they say in show business, always leave them wanting more (but not wanting what they came for in the first place).
The 80/20 Principle tells us that 20% of your clients will provide 80% of your bookings and income. Make sure you know who they are and you treat those 20% the way they deserve. (More on the 80/20 Principle to come)
I had a client once that turned to me as he handed me the check with a bemused grin on his face and said “wow, with all this money I’ve spent on massage I could have bought a car!”. He followed that statement up by saying that he had enough cars anyway (much to my relief) but it also made me realize that he had spent thousands of dollars with me. When I looked at the books, it turned out that this one client had provided almost 10% of my income for the year!
Follow Up
If you haven’t heard from one of your regulars in a while, make a point of calling them to see how they are doing. Although many new massage therapists blanch at the idea because they are afraid it seems pushy, it has always been a good thing for my practice. In fact, I usually get a booking out of it and I have had quite a few clients thank me for calling – genuinely grateful because I was concerned for their well-being. You’d be surprised how many of your clients think about coming to see you but life gets in the way and they don’t get around to it. Make it easy for them.
There are any number of strategies out there to maintain contact with your clients, so look them up and use them! Ask your colleagues what they do. Ask your old teachers. But above all…
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