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A software company found that many of its customers bought its accounting software, consisting of five modules, but never used it. No wonder when it sent sales letters offering upgrades to the new version, response was dismal. Who wants the new version of your product when they don’t even use the old version?
The firm’s survey shows that the majority of these customers only owned partial systems-one or two of the modules, but not all five. Therefore, the software did not give them a total solution for all their accounting needs, so they turned to other programs that did all five functions for one low price.
The company solved this problem by sending a special upgrade offer to customers who were not active users. It said: “Upgrade to the new version for X dollars. You get all these new features. Plus, we will send you upgraded versions of all five modules for the one low upgrade, regardless of whether you own all five already, just a few, or just one.”
It was an inexpensive offer to make, since the cost of goods in software is close to zero: It costs exactly the same to include code for five modules on a CD-ROM as it does to send code for one specific module. (The cost is in the CD-ROM, not the content recorded on it.)
The result was that 73 percent of its customers bought the upgrade. And since it had the latest version of all five modules-a total accounting solution-many finally took it out of the box, installed it on their system, and now use it to run their businesses. They went from becoming inactive buyers to active users, which means they were more receptive to buying additional software products from the company.
There is indeed a fortune locked up in dormant customers. Reactivating those inactive accounts is one of the easiest and fastest ways to re-energize your business, bring in new orders, and increase revenues. Unlike new customers, who must be acquired through expensive prospecting, you already have the names, addresses, and phone numbers of your existing customers. They already know you and your product, and have bought at least once from you. The challenge is how to get them to buy from you again.
Essentially, there are four strategies for reactivating dormant customers: re-contacting them; reselling; cross-selling; and upselling.
Re-contact inactive customers to create top-of-mind awareness. Face it-you need your customers more than they need you. Your customers are more important to you than you are to them. Therefore, while you are never going to forget about a customer, many customers can and do forget you. They are not dissatisfied. They still have a need, but they haven’t bought in a while and have forgotten about your existence.
It’s easy to reactivate a healthy percentage of these customers simply by getting in touch with them and reminding them of your existence. All you need is a database of customers with an “inactive” status, a vehicle for getting in touch, and a message or reason why you are contacting them. By simply contacting them again to remind them of your existence, you can reactivate up to 10 percent of these inactive customers. Creating a special offer designed specifically to reactivate these accounts can increase conversion rates even more.
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