“Some of the biggest companies in the world become so profitable because they have got the right philosophy when it comes to marketing for customers,” says entrepreneur and business owner James Sinclair who, in the fourth instalment of our series of 12 videos with him - Business Class with James Sinclair - shares his key philosophy.
It’s all about marketing to two different types of customers, something James has successfully done in his entertainment venue and day nurseries. So while the former welcomes a high volume of one-off customers, the latter revolves around a handful of long-term customers who have a significantly higher transactional value.
'Most' customers and the 'ideal' customer
Keep watching, as James explains how you can attract these two types of customers – who he refers to as the ‘most’ and the ‘ideal’ – to the same business and therefore inject stability into your cashflow. Remember, understanding your cashflow will help you manage your accounts and ensure you always have enough funds available to pay your bills and grow your business.
This stability is especially important for seasonal businesses, or any business that sees sales fluctuate significantly from month-to-month. And while many owners can generate reliable revenue over the course of the year – with busy periods making up for quiet periods – James is adamant that you really want to build a business that has “regularity of cashflow all the time”.
How can you do this? One idea is to turn ‘most’ customers into ‘ideal’ customers by offering memberships. This can extend customer lifetime value (CLV), which is an important metric that can help you make better business decisions. But there are many more revenue streams to explore and ways to get the most value out of your assets, as James outlines in the video.
So what can you do today to set yourself up for success? First, focus your business on customer acquisition strategies designed to attract your ‘ideal’ customer. These include building awareness and developing a targeted marketing strategy. And because you also want to develop a long-term relationship with this customer, don’t forget to also consider customer retention strategies that can grow loyalty and drive value from your existing base.
Finally, as James acknowledges in the video, once you’ve got that mix of ‘most’ and ‘ideal’ customers, you’ve created “an ecosystem of brilliance for your business’s profitability”.
Find more of James Sinclair’s Business Class videos here.