5 Marketing Myths That Are Holding Back Your Profits

If you believe that ignorance is bliss, then you should probably stop reading now.

There’s a fairly good chance that you’ve accepted at least one of the following common marketing myths as fact. And if you have, it’s been costing you money.

The good news is that it’s never too late to change.

Myth #1: If you don’t get direct, immediate sales, there’s no return on your investment.

Imagine this scenario. You spend $100 on a marketing campaign that doesn’t close any deals. The return on your investment is -100 percent, right?

Not necessarily.

What many businesspeople forget or never consider is that not all transactions occur because of a single contact. It’s much more likely that you need to continually stay in front of your clients and prospects.

When evaluating your marketing results, it’s important to consider how all your efforts contribute to the end result, not just the last contact before a transaction.

This is especially true with relationship marketing, where the goal is to build rapport to increase the likelihood of the client doing business with you again down the road, and encourage referrals.

Myth #2: There’s no need to market to existing clients.

Your clients are already sold on you, the thinking goes. That’s why they became clients in the first place. But past success does not guarantee future transactions.

It doesn’t take long for people to forget about you. And even if they do remember you, they don’t spend their time thinking about potential clients they can refer you to.

Yet clients are usually your best source for new business.

According to Marketing Metrics, the probability of selling to an existing customer is 60-70 percent, compared to just 5-20 percent with a new prospect.

And Bain Consulting determined that a 5 percent increase in customer retention can increase profitability by up to 125 percent.

The best way to increase profits is to continually market to your clients, although it will be different from how you approach prospects. Your goals should be to build and strengthen relationships rather than just make transactions. A soft-sell approach works best.

Myth #3: Following up will annoy clients.

Unplanned calls can be a disruption in someone’s busy day. But that doesn’t automatically mean they’ll be unwelcome. How your clients react depends largely on your approach.

If you launch into a sales pitch or immediately ask for referrals, then you probably will annoy those customers. However, if our call benefits them in some way, how could they react negatively?

Here are just a couple of ideas.

Call to see if they’re satisfied after their recent transaction. This demonstrates that you care about their experience beyond the transaction, and gives you an opportunity to provide additional value based on their response.

Give something of value. If you’re a ReminderMedia customer, then you can call to let clients know you’re sending them a free magazine. But it doesn’t have to be something physical. You can call to let clients know about something related to their interests or even just to say “thank you.”

Myth #4: It’s too soon to market to those people who have just closed.

It’s easy to understand why you might think this way. If you just closed a deal with someone, then they won’t need you again for some time. However, this thinking is flawed for two reasons.

First, if you wait too long, by the time they hear from you again there’s a good chance they’ve already forgotten about you. In that case, you’re starting from scratch.

Second, the clients you’ve recently worked with are some of your best sources for referrals. After all, the whole experience of working with you is fresh in their minds. If you’ve done a good job, their excitement level is high. But they probably won’t give you referrals until you ask.

Myth #5: Relationship marketing is expensive.

When you’re used to mass-mailing postcards for a fraction on the dollar, sending your clients something with a high perceived value can seem expensive by comparison. But in actuality, the opposite is usually true. In fact, according to the White House Office of Consumer Affairs, acquiring new customers can cost six to seven times more than retaining existing customers.

While the price point of a high-quality relationship marketing tool may be more than you’re used to, it is more targeted. This not only keeps your overall costs down, but results in a higher return on your investment.

Conclusion

Making marketing decisions based on myths and misconceptions leads to lost sales, higher expenses, and a smaller return on your investment. Don’t let that happen to you. Make smart decisions based on the facts.