Countertops Magazine Archive

Advanced Stone Marketing Strategies for Those Who Want More Profits

The classic book Acres of Diamonds, by Russell Conwell, teaches that most people have love, money and anything they desire well within their existing reach. In my opinion, it is a “must read” for just about anybody and I urge you to do so.

In the book, Conwell writes about Ali Hafed, a farmer who owned acres of farmland but, like most people, desperately wanted to be wealthy.

One day, his priest told him that if he could just find one diamond the size of his thumb, he could buy the entire country and live the rest of his life as an extremely wealthy man. So, Ali sold the family farm and went searching for diamonds. He searched all over the world, eventually going completely broke and ending his own life.

Shortly after Ali’s passing, the gentleman that bought his farm was giving his horse a drink from the river that ran through the property. As he was standing on the river bank watching his horse drink, he noticed a sparkle in the water. As he looked closer, he found a beautiful stone that glistened in the sun. He picked it up, and thought nothing of it until the priest stopped by and pointed out that it was, indeed, a diamond.

It turns out that the entire farm sat on acres and acres of diamonds and became one of the world’s largest diamond mines.

Poor Ali had acres of diamonds right under his nose and instead of leveraging what he already had, he left it behind for a miserable life and death.

The moral of the story is pretty easy to see. I believe that we all have our own figurative acres of diamonds. You have your own asset, just like Ali, and you just need to harvest it.

I talk to business owners like Ali every day. Regardless of their size or profitability, they all want to increase revenue. But, like Ali, they’re all looking for a solution outside of their existing asset. While there’s nothing wrong with this thinking, I advise them to look within their existing asset for profit opportunities before they invest in more product offerings, a bigger internet marketing budget or whatever it is that they’re thinking of doing.

In the stone industry, you have the trust and respect of people – your customers – who are in very valuable stages of their lives. As you probably know, there are specific life events that surround the need for home improvements, such as countertops and flooring, and it’s crucial that you know what they are. It’s even more crucial that you know you how to capitalize on them.

Calculating the Value of a Customer

Conventional thinking in the stone industry tells us that homeowners have a lifetime value that is made up of a certain amount of projects, future job requests and referrals. I hear numbers all over the board.

To calculate your average customer value, you must first find out your average revenue per job. To do this, simply take your gross revenue over the last 12 months and divide it by the total number of jobs completed.

Next, find out how much a customer referral is worth. For example, if you average one referral for every two homeowners divide your average revenue per job by two. You can then add this to your average revenue per job you just calculated. You have now determined your average lifetime customer value.

You CAN increase that number without raising prices, adding another customer or selling more products. This is just one of your own “acres of diamonds” that you have within your stone business.

Leveraging Current Assets

One way to begin the process of increasing your lifetime customer value is to identify the major life events your customers are currently in. The most common major life events are:

• Moving - Either somebody intends on selling their home or has just moved into a new home.
• New Job/Inheritance - People who have come into additional funds or income.
• Empty Nest - Now that the kids are gone there’s more money for home improvements and/or the age of the house requires it.
• Marriage – A new kitchen/bath will help the couple to better enjoy their home together.

Once you are aware of these life events, you can work on leveraging one of your business’ most valuable assets: the trust and respect of your existing customers.

By forming joint ventures with respectable local businesses that can fill a need that people in those major life events are looking for, you can increase the value of many of your customers by 25 percent, 50 percent, 200 percent or more!

Joint Ventures for Success

Just like you, local businesses are trying every day to grow their sales revenue. So, like you again, they advertise. This all works out so that they have a customer acquisition cost. Some will pay a few bucks for new customer, but others will pay several hundred or more than $1,000 to acquire a new customer.

Now, what if you leveraged your trust and customer relationships and gave these businesses a qualified customer? Do you think the business would pay you a commission for that customer? You bet! If you’re paying $100 for a new customer through your advertising efforts, would you be willing to pay $80 for a new customer if somebody brought it to you? Of course you would.

If a local business is paying $400 for a new customer, they’d love you to bring them new customers at $250. They save $150 and are dealing with a good customer. In that situation, you just increased your lifetime value by $250. Do that a few times and you’ve just struck diamonds.

Form alliances with local businesses outside the industry like movers, realtors, carpet cleaners and so on. Think of companies that can help people in the major life events above and the list of companies will be easy to form.

For example, people who want to put their home up for sale need a realtor, moving company, probably a handyman service to make their home presentable and quite a bit of moving supplies. A couple who just got married probably want to talk to a good interior decorator, insurance agent, financial planner, etc. The list is endless.

Meet with the decision makers of these local businesses to work out a fair commission and tracking system that both of you are comfortable with. Do this multiple times until you have a nice slate of joint venture partners. Then create nice marketing materials to present to your customers that outline the benefits of using your joint venture partners.

Before long, you’ll be getting commission checks in the mail and your customer value will go through the roof. As you continue increasing your amount of new customers , your revenue is boosted exponentially. That, my friend, is one large acre of diamonds within your existing business!
 

About the Author

Aileen Davis is the president of Stone Marketing Systems (SMS). SMS is dedicated exclusively to helping Stone businesses increase their profits through innovative sales and marketing strategies. To join Davis’ free e-newsletter or schedule a complimentary 30-minute marketing tune up session, go to www.stonemarketingsystems.com or call (888) 813-9658.