We’ve all heard this stat for years – it costs 5X more money to generate a new customer versus servicing an existing one. So why do most small business owner’s focus so heavily on generating new customers?

Let’s see if we can change that.

Today, you’re going to learn how to find a target market of potential customers so you aren’t wasting precious resources and money on unproductive marketing.

Ask yourself two questions

• What do people really want to buy from me?
• What related / complementary products/services are they already buying?

Once you can answer both of these questions you will know who is more predisposed to purchase what you sell. Then set out to find other businesses with the same type of customer base as you that you can share customers with. Once you do, be prepared with a compelling incentive and arrangement to encourage both customer bases to shop at both of your stores.

The basic concept looks like this

You want to find existing businesses that have the same basic customer profile that you’re looking to market your products / services to.
Then strike up a relationship with those business owners to work out an incentive for customers to purchase from both businesses.

The bottom line is you end up with an additional audience you can market to and they generate an added value from their current base.
So how do you figure this out? There’s a proven formula used by Jay Abraham that you can follow to enjoy great success.
LV = (P x F) x N – MC

• LV is the lifetime value of a customer
• P is the average profit margin from each sale
• F is the number of times (frequency) a customer buys each year
• N is the number of years customers stay with you
• MC is the marketing cost per customer (total costs/number of customers)

Once you know how much you need to spend to attract a new customer you’ll know how much of an incentive you can offer to a business to help attract them.

Here’s your step-by-step process

1. Find companies who already have the customer base you’re looking for.
2. Negotiate an incentive for them to share that customer base with you.
3. Focus your marketing resources on this group of predisposed customers.

Stop spending a fortune on ineffective marketing as you search for new customers.

Other businesses already have them ready and waiting for you to tap into them.