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Prospecting and Retention: Sure-Fire Ways to Grow Profits


How much are you spending onadvertising your business?

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This may sound crazy to some ofyou, but the more your business grows, the more you should be spending!According to many experts in the tire and automotive industry, 5% of grosssales should be dedicated to the advertising budget.

I know many of you are nodding inagreement right now; some of you are spending even more than 5%. Then, thereare those of you that won’t even advertise at all because you feel you are justbusy enough.

Prospecting and customer retentionstrategies – both critical aspects of advertising – are two ways to attract andkeep your most profitable customers.


Unless your customer retentionrate is 100%, your customer numbers will decrease steadily if you don’t have acontinuous prospecting plan.

Select a form of advertising thatallows you to do demographic and geographic targeting, as that makes the mostof your advertising dollar. And, do demographic and geographic targetingconsistently.

Direct mail does this very well,plus it usually has the highest percentage of responses per thousand reached. Acustomized mailing, rather than a shared direct mailing, usually producesresults of 2% or more!


Take a look at the results below:

Number of direct-mail piecesmailed: 10,000

Customers from conservative 2%response rate: 200

80% of those customers will returnto your store two more times: 320 visits

Total service visits generatedfrom mailing: 560

Average customer expenditure pervisit is $150: $84,000 total

Average Mail America cost toproduce and mail: $4,500

Net profit from mailing: $79,500

Customer Retention

I work with hundreds of tiredealers and distributors every year. An alarming percentage of them do not havea customer retention plan! This is unfortunate because customer relationshipsgrow your profits!

Did you know that 90% of mostcompanies’ profits come from repeat customers? How are you letting yourcustomers know you appreciate their business? On average, you will only seeeach of your customers two to four times per year; you just can’t rely on thatlimited contact to keep all of your customer relationships strong. Yourcompetition is hard at work trying to lure them away from you by sending themoffers and guarantees of service.


So, how can you keep thosevaluable customers? Use one of your most important business assets – yourdatabase! Thank customers for their business or send them service reminders. Byincreasing your customer retention rate by only 5%, you will grow your profitsby 100%!

Advertising is a critical part ofyour business growth and success. Most households are saturated with variousforms of media – Internet, television, radio, newspaper, etc. But, the mail isalways something welcomed in the household.

In fact, a study by the U.S.Postal Service shows that 57% of all consumers anticipate that their nextretail expense will be affected by what they get in the mailbox. This means themailbox is the gateway into every home. It is also one of the most effectiveways to get your advertising materials directly into the hands of consumers.

– By Angie Nielsen, CEO, MailAmerica Inc.

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