It’s easy to take existing customers for granted… but it’s not wise. Most HVAC dealers know the value of their customers and how much they cost to acquire. What most dealers don’t know is how to connect with the thousands of customers they’ve acquired over the years, so they simply do nothing. Which is a shame, especially considering that reaching all your customers every quarter takes less than 10% of your advertising budget.
You probably spent $300–$400 to acquire that customer. Doesn’t it make sense to spend $3–$4 each year to stay in touch? The homes you’ve serviced aren’t in a vacuum, and there’s a good chance at least some of them are being targeted by your competitors. Past customers are your “low-hanging fruit,” so PICK THEM! Put your message in their hands each spring, summer, fall and winter to ensure you are the one they call for service or new equipment.
I always get a chuckle when a large dealer responds: “I can’t afford to mail to all my customers!” Every dealer can afford to mail a newsletter to their customers. Follow the logic and let me know if I’m wrong:
- The industry average for advertising expenditures is 5% of sales.
- So $1,000,000 in sales = $50,000 advertising/marketing budget.
- If you have 1,000 customers for $1,000,000 in sales, the newsletter will cost you $4,000 per year, or 8% of your advertising budget.
- A dealer with $10,000,000 in sales may have 10,000 customers and hence a $500,000 advertising/marketing budget, and the newsletter investment to reach those homes would be $40,000 per year, or 8% of the ad budget.
- The numbers are bigger but the percentage is the same.
Carve out the most important advertising expenditures first: Connecting with your customers. You won’t regret it.