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Massage Today
October, 2001, Vol. 01, Issue 10

Happy Birthday to Me!

By Perry Isenberg

During a recent convention, I spent a considerable amount of time away from the BioFreeze booth to spend time with some of our wholesale distributors and business associates. This time, coupled with the fact that our company is celebrating our 10th year in business, caused me to reflect on how privileged and fortunate we truly are.

In the exhibit hall, there were 11 wholesale distributors of our product; at least seven of them have been selling the product for as long as we have been in business. Although the other four dealers have been selling our product for only a few short years, they have benefited from the best efforts of our first group of wholesalers, who together helped us achieve national distribution and demand.

This thought process sparked the following question: How much of our available resources (time, money, energy, etc.) do we direct to acquiring new business, vs. helping our established customers sell more product?

After thinking it through, I concluded that we spend at least 85% of our resources working with current customers, with the remaining 15% going toward finding new business. I'm content with these percentages, although I have no point of reference as to whether industry norms exist. I also noted that we had no prior objectives or strategies to structure our resource distribution.

I started to think of massage therapists, and wondered if they recognize the importance of programs to take care of current customers vs. promotional activity to attract new customers.

We all execute programs to attract new customers -- but do we always take the time to allocate resources to existing customers? Consider yourself a customer who responds to a promotional offer in a local paper from a massage therapy clinic. The ad offers 50% off your first massage treatment. Obviously this type of offer is great to generate new clients - at this point, it's a win-win situation. Now you are a client, and you continue to see the 50% offer every month in the paper. How impressed would you be if on your birthday, the therapist gave you your treatment for free as a thank-you for your continued support? After all, the therapist offers 50% off the first massage to a first-timer, with no guarantee the prospective client will become a regular client who could also generate new business via word-of mouth-referral.

Let's do the math:

Ten consumers take the 50% off first-time offer. Two become regular clients; one becomes a semi-regular client. Assuming regular is once a month, and the hour session is $60.00:

  1. Seven consumers who you only see once cost you $210 and generate $210 in revenue ($0 profit).
  2. Two new regular clients cost you $60, but provide 22 treatments at $60 = $1,320 - $60 (+$1,260)
  3. One semi-regular client costs you $30, but provides five treatments at $60 =$300 - $30 (+$270)

This provides you $1,530 in revenue for 12 months. Ten regular clients provide you with $7,200 in revenue. If you offered one free treatment to each of those clients, it would cost you $600; $7,200 - $600 = $6,600 in revenue for 12 months.

This exercise clearly demonstrates that heavily skewing your resources to existing customers is a worthwhile strategy. The word-of-mouth referrals alone for the "birthday" gesture would be worth thousands of dollars to any therapist.

Staying in touch with customers, and treating and rewarding them with the respect they deserve, is a worthwhile business decision. Review how you use your resources, and make sure you take care of those who take care of you! In the meantime, be healthy, be good, stay focused and motivated.


Click here for previous articles by Perry Isenberg.

 

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