DALLAS — As Ben Franklin used to say, “A penny saved is a penny earned.” It’s a saying that guides many of us as owners in the drycleaning industry. Every day we monitor our labor costs, supply costs, and utility costs to make sure that we’re not wasting one penny that could be going to the bottom line.
Frequently, owners ask me questions about sales. How do I find new customers? How should I advertise to get new people in the door? How do I grow revenue?
I would argue that the best way to grow revenue is to make sure you save the revenue you’ve already got. After all, just like pennies, revenue saved is revenue earned.
LEAKY BUCKET
To illustrate the power of revenue saved, or “revenue retention,” as it is commonly called, I like to think of revenue in a bucket.
But the bucket can leak. The question is how do we keep it from leaking in the first place? Here are four steps.
1. Execute
Research has consistently shown that the vast majority of drycleaning and laundry customers will stay with their current cleaner until there is a major problem like a lost item. Thus, deliver great service to your customers.
2. Monitor
Do you know how many of your customers haven’t visited you in the last month? Retaining customers is all about identifying signs from your customer.
3. Listen
Once you know which customers may be wavering, it’s critical to engage with them and listen. It never hurts to call or send an e-mail and connect.
4. Inform
Retaining revenue isn’t just about saving customers who were about to leave, it’s also about informing current customers of all that you have to offer. I’m always astounded by customers of ours who have been with us for years and say, “I didn’t know you did comforters.”
Show your customers the range of services that you provide. If you’re successful enough in this strategy, you can increase revenue without ever getting a new customer. Now that’s revenue saved!
If you’re skeptical of the power of saving revenue, I would issue a challenge to you. Try to retain 100% of revenue from last year. Execute on your core business, monitor, listen, and tell customers about all of your services.
I can promise you that, though you may not hit 100% retention, you will see a marked increase in sales and a whole lot more pennies in your bank account!
To read Part 1, go HERE.
Have a question or comment? E-mail our editor Dave Davis at [email protected].