The Four Ways to Increase Total Customer Value

There are only four ways to increase Total Customer Value:

1. INCREASE AVERAGE ORDER OR PURCHASE SIZE. Restaurants do this by effectively merchandising desserts and take-home treats and other products. Industrial marketers do it by expanding product line use and "upping" the customer to bigger sizes. Mail-order companies do it with "today's telephone specials," offered to the caller after his intended order has been taken.

2. INCREASE FREQUENCY OF REPEAT PURCHASE.

Using rewards, discounts, frequent buyer clubs, volume rebates, and frequent contact, you can capture a larger share of each customer's expenditures.

Murray Raphael*, direct marketing expert and developer of the retail mall in Atlantic City called Gordon's Alley, says, "In Gordon's Alley, we have put together a Gordon's Gold Card program. The criteria is simple: did a customer spend $1,000 a year or more with us? If they did, terrific. They are entitled to a Gold Card. Now, what does the Gold Card entitle them to? Lots of nice things, including:

1. A free lunch every month from our Alley Deli.

2. Advance announcements of sales by first-class mail.

3. Special vacation packages—a tie-in with our on-site travel agency.

* Murray Raphael is the author of a wonderful little book of marketing ideas—a collection of his columns from Direct Marketing Magazine. The book But Would Saks Do It? is available for $10.00 plus $1.50 shipping and handling from Empire Communications, 5818 North 7th Street, #103, Phoenix, AZ 85014.

4. Unadvertised specials. Every once in a while, we'll look over our stock and see we don't have enough for a fullblown sale/reduction, but enough for a select group of customers. That's you, Mr./Ms. Gold Card.

5. Free gift wrapping.

6. Birthday presents—a special gift from our in-store gourmet shop, and with it a $10 gift certificate, which brings them into our store."

Now, I want you to notice two things about Murray's brilliant program: first, it has built-in frequent contact with customers. Two, its every feature works to bring the customer back to the store. Why don't more stores and businesses do this? Why don't groups of noncompeting businesses get together and do this? I dunno.

3. OFFER EXISTENT CUSTOMERS A GREATER VARIETY OF

GOODS AND SERVICES.

These people are predisposed to buy from you.

ULTIMATE MARKETING SECRET WEAPON #15 DEVELOPING NEW PRODUCTS AND SERVICES FOR EXISTENT CUSTOMERS INSTEAD OF GETTING NEW CUSTOMERS FOR EXISTENT PRODUCTS AND SERVICES

4. GET EXISTENT CUSTOMERS TO BRING YOU THEIR FRIENDS, RELATIVES, NEIGHBORS, BUSINESS ASSOCIATES, EMPLOYEES, AND OTHERS AS NEW CUSTOMERS. We'll explore this in detail in a later chapter. Suffice it to say for now that referrals can be the lifeblood of a business.

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