Attracting and converting new customers is an important part of any business. Revenue is the lifeblood of our companies, and it’s important to devote time and energy to ensuring we have a steady, fresh supply. One source of revenue we shouldn’t overlook, though, is our existing customer base. If we’re chasing down new clients without first looking at how we can maximize revenue from our current clients, we’re missing out on real opportunities.
One of the very best ways I’ve found to bump up my billing is by converting customers to a recurring fee plan. Here’s how it works:
Say you own an HVAC company. You have a stable of corporate clients, and when they call you for a repair, it’s never cheap. Your average call results in a bill for $2000. You make an average of one call per year to each client, but you’re looking for a way to increase your per client earnings. So you offer your clients a plan. They pay $200 each month, and when they call you, their service is covered (with appropriate restrictions of course.) Your revenue per client has gone up to $2400 per year, and you’re providing a huge benefit to your clients as well. Rather than having to scrape together $2K when the a/c goes on the fritz in August, they know they’re covered. They benefit from predictable costs, and you benefit from increased revenue and predictable income. It’s a win-win.
But there’s more: your technicians have added incentive to work efficiently, since they’re not billing by the hour. They also have incentive to fix things properly the first time, since any shoddy work will come out of your bottom line, should they have to go back for a second repair. Likewise, your customers will call you at the first sign of trouble, rather than waiting for a small problem to turn into a large one.
You’ll be surprised at how easily you’ll be able to convert customers to a recurring fee model. We’re far less likely to balk at a low monthly fee than we are to experience sticker shock when we look at the annual total. Once your customers get used to your new model, they don’t even think about that predictable monthly expense. It’s practically invisible to them.
Nearly every business can find some way to implement a recurring fee program. Whether you’re a liquor store that enrolls clients in a Beer-of-the-Month Club, or you’re an office supplier who bills monthly for copier servicing plans, you can find a way to make recurring fees work for your company.
The best of both worlds is when your recurring fees bring your customers even closer to you and your staff. Creating an elite program for your top-drawer clients gives the client an ego boost and gives you a revenue boost. You’re preserving future business, and you’re doing it in a way that lets your clients manage their costs effectively.