THE MAGAZINE FOR PROFESSIONALS

Past customers may be more valuable than new ones when marketing

Brandon Lewis

Every day, painting contractors ask me: “What’s the best way to market my painting business? Social media? Email marketing? Mail? Lead services? Canvassing?”

Unfortunately, when it comes to marketing, painters always start the conversation with HOW and what medium they should use. Rarely, do they ask: “WHO should I focus my marketing messages and marketing mediums toward?”

Most owners spend much of their marketing budget generating leads from stone-cold strangers. They neglect past customers entirely and may only think to send a wimpy Christmas card to them once a year. Meanwhile, new customers, new leads, and new business is the mantra they chant: “New, new, new!” Well, I’m here to tell you that’s “dumb, dumb, dumb,” for five very important reasons.

OLD GUYS RULE. HERE’S WHY:

  1. After conducting hundreds of customer reactivation campaigns, I can confidently tell you that each customer on your list represents about $1,000 per year in organic spending. So, if you have a list of 500 past customers, they are spending $500,000 in repaint services yearly. Look at your repeat sales for the past 12 months. How much money are you leaving on the table?
  2. I have found, on average, past customers have an estimated conversion rate of 60–75%, while new prospects only convert at 25–40%. You must write almost twice the number of estimates for new customers in order to generate the same revenue from past one.
  3. Cost of sale, or how much money you must spend on marketing and sales to get one signed contract, is anywhere from 5 to 25 times higher for new customers when compared to past one, according to the Harvard Business Review. After tracking numbers with owners for years, I would put my number at roughly 12 times higher.
  4. New customers cannot refer you. Most painters say word of mouth is their best form of advertising. However, when pressed, they admit they do not regularly communicate with past customers about their referral programs. If referrals are essential to your success, marketing to former customers is a no-brainer.
  5. When painting contractors sell their businesses, they often only get a few bucks for used equipment hastily posted on Craigslist. Many simply close up shop and walk away. It’s sad. But those with a large customer list and documented marketing systems in place to keep customers purchasing and referring can sell a business for top dollar.

REACTIVATING PAST CUSTOMERS

Reactivating your past customers with a multi-step, multi-medium marketing campaign over a 30-day period in the early spring and late fall represents the bare minimum in customer retention. I’ve repeatedly witnessed small lists of past customers (fewer than 1,200) generate more than $250,000 in sales with just one of these semiannual campaigns.

In between campaigns, consider a mailed and emailed monthly newsletter for your customers that is light on sales pitches yet heavy on personal connection. Tell them something interesting and useful to THEM, not about you. Reinforce the newsletter by presenting that same content to them using Facebook Custom Audience.

If you want to build a more stable painting business—one that can predictably support your family and those you employ—become a serious student of customer retention and reactivation.

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Brandon Lewis is the founder of The Academy for Professional Painting Contractors and provides done-for-you marketing and sales systems that maximize the financial value of past customers and unconverted lead lists: PaintersAcademy.com. For other painting business marketing tips, visit inpaintmag.com

 

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