More Frequency = More Money

How do you get existing customers to buy more often? At Next Level we refer to these strategies as Frequency Strategies. The more frequent a customer buys from you (all other things being equal), the more money you make. Simple. This strategy may seem difficult on the surface but really isn’t.

The customers buy the amount that they want, right? How do you change what appears to be outside your control? It can be done and the rewards are significant. In fact, making positive improvements in this are alone will have the most impact on your company’s profitability than any other strategy here.

Let’s use an example to illustrate the Frequency Strategy concept. At Next Level, we love pizza. You have to in Chicago - the home of the deep-dish pizza. Sure families order pizza about once every two weeks. Would we eat pizza more often? You bet, every day if our wives would agree that pizza is a well-balanced meal.

The point is that we don’t buy pizza more often, but are willing to. All we need is for someone to build up our desire more often than our natural cycle offers. If our local pizzeria stimulated an additional convenience purchase through a coupon offer at my local video store, we would probably order pizza every weekend. The key to increasing our frequency is a natural love for pizza and the convenience and savings offered by the coupon initiative.

Let’s look at the financial gain. If the pizza cost $15 and we buy once every two weeks, we normally spend $390 with the pizzeria (26 weeks x $15). If the frequency went up to weekly we doubled our revenues (52 weeks x $15). Consider if this pizzeria applied this Frequency Strategy to its entire customer base of 2,000 families. Revenues would go from $780,000 to $1,560,000. Maybe you can’t always double the frequency but every extra purchase has a huge positive impact.

Here is another example. Let’s use a life insurance business as our example. You might think that after a person buys a policy that fits their needs that no additional opportunities exist. Wrong. After selling the right policy, try to sell them (at a minimal cost) annual check-ups. Things change.

The customer might have a child, for example, beneficiary’s change, but so might the level of coverage. The annual check up enhances the positive benefits by providing them with an additional level of security they desire (because that is really what you are selling, security). The point is that frequency opportunities do exist. You have to look for them.

Here is another example. An appliance store sells a home a washer and dryer. The store also has a repair service as part of their offering. Where are the frequency opportunities? Try this one. As part of a regular communication plan with its customers, the store notifies each customer two months before the manufacturer’s warranty is to expire and offers a free check up.

The offer stresses that the check up is free and will identify worn parts that may break soon after the warranty expires. By checking now before the warranty expires, the customer can get the parts for free and avoid a more costly repair later. What is the impact?

The customer loves the proactive approach and feels that the store is trying to save them money. While the check up and the parts for any repairs are free, the labor on the repairs is not. The store not only locked this revenue into their company and avoided losing the customer to someone else later on when their machine broke; they also accelerated the cash flow on this job by months. Oh, we aren’t done yet.

What if, during the check up, the repairman asked if the customer was having problems with any other appliance (not just the original washer and dryer?)? Do you think a few customers might also have the trusted repairman check on something else at no cost to them? Revenues for repairs on products not sold originally by the store would also likely go up. With the positive customer perception of customer service the company now enjoys, they also position themselves well for additional appliance sales.

Frequency may seem difficult. You just need to get more creative to find opportunities.

Seven Steps to Identify Frequency Strategy Opportunities

1. List out every product/service you provide in one column.
2. In another column, write down the minimum number of purchases made by your better customers.
3. In a third column, write down the primary benefits each product/service provides your customers.
4. In the fourth column, indicate if frequency strategies may be possible. You may not know yet. Just mark if it is a possibility, i.e. no legal or other restraints.
5. Now take that list to your team members. Divide the product/services up between them if you have a broad product/service offering.
6. Ask the team members their thoughts on increasing frequency. Focus on the benefits each product/services offers the customer. Would the customer like to have more of these benefits faster or more frequently? As long as the value equation (benefits over costs) is positive, there may be a possibility to increase frequency.
7. Write down all of the ideas and prioritize which ones to try out.

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If you would like to implement Frequency Strategies in your business, but find it hard to take your business to the Next Level, we can help. Email us at This e-mail address is being protected from spambots. You need JavaScript enabled to view it or call us at 630-665-4440.