Starting a business is a major challenge in and of itself . Finding and keeping your customers is yet another especially if your business is service driven. Now that you’ve secured their business and provided them with top-quality service, leaving behind you a satisfied customer. Once your client’s contract ends, that concludes your involvement with them for that specific job. But if you want your business to be successful, you should recognize that the end of a specific contract shouldn’t be the end of your relationship with them.
The service contracts expire, but they can also be renewed– this will ensure that you continue to receive business from the client time and time again. Your clients don’t always know or remember when to renew their contracts, but as the business owner you are uniquely positioned to give them that little push and turn them into repeat customers.
The following two tips will better understand the importance of this often-neglected part of the client’s buying cycle and ensure that your business relationship with them continues well into the future.
1) Contract renewals allow you to have predictable income.
Predicting the cash flows of any business isn’t always easy, thus, having analytics will greatly assist with this. While you can often grasp the seasonal fluctuation of your sales to some degree, you can’t always ensure that you will have a steady source of revenue through the year. Renewing your contracts with your customers can be one of your easiest ways to make sales, given that they are already (often loyal) customers in the first place!
For example, a freelance writer’s entire income and workload is decided on a per-contract basis. Unless you are experience in the field, you will have to work hard to earn and maintain these customers who you hope will purchase from you on a regular base. Getting the customers is difficult enough, but many times you will do one job for them and then never hear from them again. Just providing them with high-quality writing isn’t enough. It’s important to go the extra mile to get my customers to renew their contracts to get monthly sustainable revenue.
Keep in touch with them, offer them additional incentives, even offer them some additional level of customization in their contracts! There are many different tactics to encourage past and present clients to become repeat customers. In doing so, you ensure that you have a steady stream of revenue that you can rely upon even if business slows down.
2) Track the Lifetime Value of a Customer
If your client has agreed to renew their contracts for a pre-set length of time into the future, you can immediately quantify the revenue that customer will generate for that length of time. Furthermore, you will also be able to understand the precise nature of the value they bring to your business by analyzing the patterns and frequency of their buying patterns. If you keep track of the contracts and purchases you have received from this customer over the duration of their sales, you’ll better understand the value they bring to your business.
This number is important because it gives you insight as to the repeat business you can get from a customer and what they are willing to spend over a period of time. It helps to understand how much you are spending on each customer. It’s a way for you to figure out how much resources you need to allocate (i.e. time and marketing dollars) to retain and keep this customer happy.
The easiest way to figure out a lifetime value is:
(Avg Value of a Sale) X (# of Repeat Transactions) X (Avg Retention Time in Months or Years for a Typical Customer)
For example, a business owner spends $10 every month for 3 years on website hosting. The lifetime value of that customer would be:
$10 X 12 months X 3 years = $360 in total revenue (or $120 per year).
A hosting company should spend less than $120 per year to acquire a new small business owner who needs a web site. It becomes a benchmark to prove profitability and overall success of your business.
Once you have figured out the lifetime value of a customer, you can decide on the investment you want to reach short and long terms. It’s important when you are starting a business because you can create cost effective, measurable marketing programs to see how much you are saving per customer. Thus, understanding the lifetime value attribute to how successful you business will be.
When you renew a customer’s contract, you always have the opportunity to add further value to their purchase. In doing so, you give them an incentive to renew their contracts with you, adding value back to your business in turn. If you understand how to create and harness repeat customers, you will provide the lynchpin in your business model that will ensure that you remain profitable for years to come.
With so many online resources, yоur customers has a lot of information about your business before they decide to become your customer. It can be a lengthy process and a bit more complex than ѕіmрlу saying; "I need tо purchase something and I know precisely from who".
The customer buying cycle is defined in 3 steps. First, you have awareness which can be described as the moment the customer sees your product while there is a need for it. Second, there is moment of consideration where they are evaluating your product or services for a possible purchase. Lastly, the final step is purchase, where the buyer makes a purchase.
Here are some ways to market to these buyers:
Having an online presence such as a website that describes your product and services will help your buyer find you. It’s always good to have testimonials to provide credibility as well as recommendations through sites such as yelp or google business.
When your customer has found you, it’s best to introduce your product as a solution to a problem the buyer may be having. The buyer is trying to see if your offering can meet their challenges and how you will be doing it.
Having a quote or contract that describes your methodology with a breakdown of costs associated with how you will be address their needs will be beneficial at this stage. describe the value the buyer will be receiving if they choose you as a vendor and include reviews or customer references.
The buyer is ready to be your customer. If the customer requires more time, you should consider giving them a discount or coupons. Having a simply way for them to agree to your terms through electronic signature and payments will be helpful to ensure you close the deal quickly.
Successful businesses maintain good habits and it is one of the reasons why they managed to be where they are now. Habits they have picked along the way, such as good contract management , has helped them get to where they are at the moment and take their business to the next level. The bad news is that there are small businesses that don’t have any good habits at all. The good news is that they can start changing their attitude and practices in order to develop good habits.
In a highly competitive landscape, it’s important and vital to make sure you ensure good habits are enforced so your business continues to thrive. Here are some good habits that can help small businesses include:
1) Focusing Your energy
To ensure you utilize every minute and hour of each day, it’s important to learn how to focus on the most rewarding tasks. Take care of the low hanging fruits first. Review your list of things to do and evaluate which task you can do now that will bring forth the most value to your customers and team. Give each task a percentage of impact and ask yourself what are the top 3 things I can do that will benefit my business the most.
Ask yourself what is the most important thing you need to do today in order to set a foundation for your business. It’s always important to think about how something can help you to increase revenue or reduce your operating cost. The vital part of any business to knowing when you should create a strategy for long term goals while balancing short term objectives. Most businesses have 3-5 simple objectives they want to accomplish each quarter. Everything else you do should coincide with those objectives. Never lose sight of the goals you have set out for yourself. Once you have a goal in place, work each day to get closer to those goals.
Having ways to measure performance or data analytics in your business helps you prioritize your business. Based on that data, you can start to formulate patterns and understand what works and what doesn’t. Focus on what works and continue to improve business workflow to ensure your success.
3) Create Task and Execute
With each of your goals or objectives, it’s essential to follow through to ensure long-term success. Most of the time a goal has a few steps in between until it’s completed. Write it all down. Sometimes, it helps to work backwards if there are dates involved. Write down and revise as needed. With each task, you get closer and closer to where you want to be.
The use of software to streamline task and follow up is very useful in situations where there are a lot of repetitive, mundane work. Try to look for solutions like Mosspaper, a quote and contract management platform, to help you execute your business goals in a more orderly fashion. Mosspaper focuses on different aspects of your business such as operations, finance, and sales. With built-in workflows, it helps you consolidate the management of your team’s workload all in one platform.
4) Positive Mindset
Being happy and having a positive mental outlook can help with any situation. It is always said that you don’t have control with external factors, but you do have control over how you handle situations. With positive thinking regardless of what you are going through, you will continue to work through situations and reach your goals. A great attitude for success and having gratitude can go a long way. If you understand what you’re trying to achieve and have patience with the process, you will be ahead of the rest.
It’s important to have good habits to succeed as an entrepreneur or small business owner. There are many different ways to get to where you want to be. Having disciplined habits can make or break your company as you face the challenges limited time and resources on a daily basis. Working smarter is always better.
For any interior designer, being able to provide accurate and effective sales quotes to your clients can be one of the best ways to drum up recurring business. When you are able to give your clients something that they can actually understand and feel comfortable with paying, you give off a far more professional approach and style. However, being able to give quotation services that are accurate and detailed can be quite tricky, and for many interior designers it can be easier to just stick to the basics. Here are some of the best ways that you can start changing your mindset and increasing the quality of work that you provide by using a value-based quotation system.
Here are some of the best ways that you can start changing your mindset and increasing the quality of work that you provide by using a value-based quotation system.
1) Provide a Work Summary
It’s always important to make sure that your clients are able to get a summary of the upcoming job so they can always refer to what is going to be taking place. This will be a list of goals that are to be achieved throughout the process; include key benefits within the work summary and an overall price of the job as a well. Dealing with part of any quote management system can be tough for an interior designer, but looking for software packages that help you manage this – for example, we recommend checking out Mosspaper – can be a massively beneficial way to keep things flowing.
2) Include Suggestions
One thing that always helps your clients out is to give them easy feedback and suggestions as to what they could improve moving forward; by having this within the quotation you are providing a bit more authority and helping them see things they maybe would have missed themselves. This helps to build extra trust between you both and makes your sales quotes a bit different to the rest.
3) Itemize Your Pricing
You need to make sure that your clients are able to see why the price is the way it is. If you can give them a fully itemized list to help them see what their money is paying for, the quote will feel far more authentic. Some designers aren’t comfortable doing this, but it’s an absolute must. Again, Mosspaper can help you do this. The administrative side of the software is excellent and will make creating references to items being used on the job so much easier.
4) Include Terms & Conditions
You always need to have the right legal information included with a quotation – especially in something as expensive and serious as interior design. Please make sure that your quote includes the terms and conditions section so the clients really understands what is required of them. Mosspaper can help you audit track all documents like this so you can be sure that the client reads and agrees to everything that is mention on the sales quote.
5) Provide References
Lastly, make sure that you provide some kind of reference to your potential client with a quote. This adds such an extra layer of value to proceedings and will really go a long way to help you become a favored option for the job. If you want to benefit from getting more work and the best kind of jobs, then working towards a value-based quotation system can be the best way to go.
As an small business, it's important to make sure you provide customers with the right information in an organized matter. It makes it 10 times easier on you in the end. Thus, it's imperative to provide your customer with a value-based quote when you start working with them. Professionalism, attention to detail, and thoroughness goes a long way.