$715K from a $45 investment: How to cheaply increase sales

With a customer database and everyday technology you can easily increase your sales. Photo / Thinkstock

Would you like a significant increase in sales and a lot of new customers? Well you have the ingredients at hand to do just that.

Let me explain by telling you about the clever marketing idea of an Auckland hair salon, which is relevant for any business. Your business. The salon owners combined clever thinking with two business ingredients to their advantage (which so many others ignore).

1. A customer database
2. Everyday technology

Like many other businesses, the salon had different services. Hair. Beauty therapy and makeup. This creates three separate services to cross market to customers. Their software system has built in bulk SMS messaging. They went to their database and selected 500 of their 'hair' customers. They sent each a text (SMS) message saying in effect "as a valued customer if you come in and use a make-up or beauty therapy service, you'll receive a gift voucher of equal value for yourself or a friend." The SMS messages cost them $45 to send.

This was a targeted, inexpensive, easy and value add marketing campaign to their clients. Instead of cannibalising sales or income (offering a percentage of hair services to hair clients) they cross marketed additional services not being used by this category of client.

Their result was that 300 (of the 500 sent the message) came in and took up the offer. A full 60 per cent, representing 300 non-discounted new pieces of business. Let's say the average voucher spend was $80. Three hundred clients in at $80 is $24,000 in revenue. When a voucher is used, the real out of pocket cost was 50 per cent or $40. Net gain - $11,955 (don't forget the $45 for text messages). But it doesn't stop here.

They also gained roughly $704,000 in additional, long term revenue.

I know what you're thinking. WHAT?

The fact is 240 free vouchers were given to friends, which became a fabulous (inexpensive) source of new customers. 110 of the 240 people returned and became new customers. The average spend in a salon is $800 per year. 110 new clients after a year is (110 x $800), $88,000.

However let's look at the long term value of a client. What will the revenue be in five years from that marketing campaign? ($88,000 x 5) is $704,000.

One clever marketing campaign! Net long term revenue $715,955 ($11955 + $704,000).

So how can you do it?

1. Export your database information into Excel

2. No database? If you use online accounting software like Xero, you can use this information. In the case of Xero, you can create a targeted list of your customers with their Smart lists. Have a look at this 1 min, 40 second how-to video.

3. This list can be saved as a Microsoft Excel file.

4. If you have Microsoft Word, and use Outlook, you can do a personalised email merge with your Smart list. You might be familiar with merging documents, for example the old way you would have created invoices or receipts before you joined xero. Instead of merging to individual letters, you can merge to email. This means if you have a Smart list of 500 of your contacts, you could with one push of a button, send 500 individual, personalised emails.

I've created a video to show you how you do a personalised email merge.

5. If you want to do a sms message, there are many services online that enable you to merge to sms rather than to email, all very inexpensively.

With a database accessible through Smart lists and the ability to send emails - all that is missing is your idea on what to communicate with your customers.

Written by Debbie Mayo-Smith, One of New Zealand's most in-demand speakers, trainers and bestselling authors. Debbie works with companies that want more effective staff. For more tips and business ideas sign up for her free monthly newsletter.