What’s the most valuable asset your business owns?
Don’t be too quick to answer. Give it some thought.
Is it your products?
Is it your employees?
Is it your building or office equipment?
Is it you, the fearless leader?
What do you think?
Actually, the truth is, each one of these can easily be replaced (yes, even YOU can be replaced).
Stumped?
The most valuable asset any business owns is its customer list.
Jay Abraham said once that if his office was on fire the only thing he would take with him is his customer list.
Why? Why is your customer list the most valuable asset your business owns?
First, these are your customers. They are people who have given you money. That’s the reason you’re in business.
Without them you would not have a business! So it makes sense that they are valuable.
Second, if you had a disaster in your business then only thing you would need to get started again is your customer list. They bought from you once and chances are they will buy from you again.
Get your marketing ramped up, create a new product and sales will start flowing again, all from your existing list.
So your cash flow depends on your customer list. No cash flow, no business!
Third, cost to contact them is low.
Businesses spend a lot of money getting new customers. In fact, most lose money getting a new customer because marketing and advertising are so expensive. It’s much cheaper to sell something to an existing customer than it is trying to convince a total stranger to buy from you.
The real profits in most businesses are made on the 2nd and 3rd sale to the same customer because the cost is low and they have already proven that they will spend money with you.
Fourth, your customer list can make you money in other ways than by selling to them directly.
You can offer them products and services that other people create and get a commission on each sales. This is called joint venturing. In the online world it is also called affiliate marketing.
You can also make money from the list itself. In the world of direct marketing, list rental is a big business.
In fact, some companies will get customers by the thousands by offering low cost items and lose money on the front end just to get the customer list compiled. Then they make all their profits on the rental of those names!
Because they are buyers, they know their names are valuable.
It’s actually a great deal for the company that rents the list. It will cost them much less money to rent an existing list than it would be to build a list from scratch, in many cases.
Because names, especially buyers names are so valuable, list owners go to great lengths to protect those names and the offers they receive from those who rent them. In most cases you will have to get your creative approved ahead before you can mail to the list.
I’ve spoken mainly about renting lists, but you can also buy the list you want to use (as mentioned, the list owner will only allow rentals in most cases).
If you rent a list, it is for a one-time use only. If you try using the list again, you’ll be in big trouble and possibly face legal action. The best case is you will be banned from renting the list ever again. How will they know if you use the list twice?
The list is seeded… that means that some of the names on the list actually go back to the owner of the list so they will know what you sent and how often you sent it.
But if you’ve tested a list on a rental basis and it’s pulling in orders or leads, you may have the option of buying the list. That is usually the most expensive option, but for some offers it makes sense because you’ll get to mail anytime you want to these buyers.
For example, it might cost $150 per thousand names to rent, but $495 per thousand to buy the list.
The advantage is that you get to mail as much as you want when you buy the list.
The bottom line is that your customer list is the most valuable asset your company owns. Are you protecting it, backing up customer list data on a regular basis and storing it in a secure off-site location?
If my office was burning to the ground, the last thing I want to worry about is grabbing my customer list! I want to get my employees and myself out as fast as possible. So instead I have it stored in a secure off-site facility so I never have to worry about it. And what if the secure facility burns down? I have one backup copy at home and one in my safety deposit box at my bank. Yes, it’s that valuable.