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Repeat or New clients… which is better?

Written by Adrian Caruso, CEO/Master Business Coach of TA Fastrack

As so often is the case with our coaching clients, the question as to whether the strategy of focusing on new customers or repeat customers arises repeatedly. With the TA Fastrack coaching programs we advise that the most profitable and lucrative option for our clients depends on their business goals, their travel business and their travel customers.

Most of the time when we work with our clients we tackle repeat business first because these are fish that have been caught before, grown bigger over time, you know where you can catch them, you don’t need to spend as much money on bait and will no doubt if you manage them correctly come back to you again. This is the fastest way to generate profits for travel businesses. Plus they hang out with other similar sized fish therefore will refer them.  After this then we tackle the other strategies.

Experts for years have been telling us that it costs less to get existing customers to buy more than it does to find new ones. By lowering your lead generation costs, it enables the business to experience higher operating margins which enable you to invest critical resources elsewhere in the business.

But this is only one part of the cycle of business. Sure if you just concentrated on repeat business consistently, you would for a period of time increase approximately 20% to 30% per annum by just focusing on past customers. By placing the spotlight on your top, VIP and platinum clients will reap the rewards for you. But think about it, how much can you really squeeze out of your customers? Can you double their spending? Eventually your sales will start to fall or decline so you have to look at other options.

If you have bigger plans than just fishing in the same size pond and making them grow over time then you have to look at other options. If you want your travel business to grow by 60%, 80% even a 100% then you are going to need a bigger pond with more fish.

By having three strategies in action being a retention strategy (repeat clients), and a expansion strategy (getting clients to spend more) and a acquisition strategy (new clients) you will grow at a much faster rate. By having the three strategies work all together, you introduce new clients and you look for ways to manage past clients you complete the sales cycle. A complete cycle generates new business, gets clients to spend more, refer others, manages past business and potentially generates higher profits.

The top travel companies do all. They increase the amount customers spend with them and they expand their customer base. Understand that if you concentrate solely on one or the other you fall into the trap that many travel businesses face. If your efforts are focused on just repeat business and increasing spending levels then your competitors may take away market share over time. If your efforts are focused on new business then your costs will blow out and your customers will never go through you again because of poor service.

Here are a few steps to help your travel business grow:

1. Focus on getting new customers, launch marketing campaigns that consist of direct mail, competitions, events, sponsorships, web marketing, strategic alliances, telephone marketing and so on to drive in new business.
2. Develop referral systems to manage current clients and take advantage of customer’s family, personal and work related networks.
3. Focus on servicing your niche and managing your pool of customers so that they provide repeat business time after time. Expand and grow with your niche market and change accordingly to meet their needs.
4. Keep your customers happy, loyal and develop additional products and services for them.   Exceptional customer service is the common factor in the world’s most profitable travel businesses….nothing else! Make sure you are delivering this and keep on improving it every week…challenge yourself to do so!
5. Enhance the customer service experience by focusing and searching to fix their problems. If you can address their complaints successfully, the customer is several times more likely to come back again.  
6. Harness a culture that looks for problems and establish customer service protocols to ensure issues are dealt with swiftly and accurately.
7. Use technology and allocate resources to customer service because they can be a gold mine to manage repeat business and source new opportunities for product and service development.
8. Communication through surveys, casual phone calls, track online behaviour, go to networking events, conferences, conventions, newsletters and so on. Plus communicate and provide customers with an understanding of how you help them and how you can help them better.
9. Provide loyalty discounts, reward programs, competitions, special offers, special occasion cards and gifts.
10. Blast the competition away by your aggressiveness to meet the customer’s needs. Publicise to the marketplace why you do things better, faster and more efficient than your competitors could ever. Offer your clients a unique experience that sends a clear cut message that there is no second best to the products and services your travel business offers. Communicate the message to your customers that you are better and follow up that promise by providing real results for your clients.

Take these tips on board and start changing the way you do business. Look for ways that you can make a difference to your new and past clients. Aggressively search for new avenues of business, develop the relationship further with your clients, think big and go for it.

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email, 07 3630 1298, http://www.tafastrack.com

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