Category Brand Boosters

Building Your Customer Base (Part 5): Customer Loyalty

Customer loyalty: How to generate repeat business

It’s always a great feeling to get a sale and though one-off sales are fine, the chances are you will want every customer to buy from you again and again. The most obvious way to achieve this is to provide a good product or service at a good price, along with excellent customer service. It has never been more important to treat your customers well, since almost half of all consumers now put more importance on customer service since the start of the recession.

Customers love being valued and treated like VIPs. Many shoppers today will not stand for a poor retail experience.

An ‘Insites Study’ revealed 36% would not give a business a second chance if they didn’t feel it was up to scratch.

But generating customer loyalty goes well beyond service at the point of sale.

Take time to find out what customers really value about your business – and give it to them. Involve them in your business. You can even do this by letting them get involved in helping you develop new products and services.

There is always a market for anything that saves people time or money, makes their lives easier, or simpler or cheaper. When providing something like this, make sure your costs are very competitive and you are giving customers exactly what they want, rather than trying to tell them what you think they want. You have to be absolutely focused on delivering something of real value to them.

 

Missed the earlier posts in this series? Check out: Customer ProfilinLeveraging Existing CustomersHow To Engage After The Sale, and Acquiring New Customers

Building Your Customer Base (Part 4): Acquiring new customers

Acquiring new customers

When it comes to increasing the size of your customer base, the first people you should look to are your most loyal customers. They are your best salespeople because they are more likely to recommend your business to others.

However, if you take the time to learn about them through profiling and communication this will help to tell you who you should be targeting next. Ideally, you should aim to get more customers that are just like the best customers that you already have.

Targeting prospects

You will find that when you are marketing well to your existing customers, you will very quickly start to pick up new ones. To get to this stage, you will have had to learn not only who your customers are but where they are. You will also have discovered what they like about your product or services, when they buy and what communications channels they use.

You then use this exact same information to deliberately target fresh customers through offers and promotions and through generating referrals from existing customers.

 

How and when to run special offers and promotions

Potential customers are much more likely to take the plunge and buy from you if you offer good incentives for them to do so. The classic ‘Buy-one-get-one-free’ is great if you have unsold stock to shift.

However there are many other incentives you can use, and understanding customer preferences is crucial when making offers and promotions.

For example:

  • Offering a product or service at a discounted rate when a customer buys a popular related product or service will increase your average sale value.
  • Selecting popular products as prizes for competitions and challenges will increase engagement and referrals, particularly online.

Getting the timing right is equally important. When do your customers most likely want to hear what you are offering?  Seasonal sales and external events such as national holidays can offer good hooks for promotions. So, too, can the release of a new and improved product or service.

Don’t just do it randomly: Have a reason to make the offer and stress the value and benefits your customer will gain by taking this offer up.

 

Use your customers themselves to increase your customer base

Nobody knows the other players in the marketplace better than your existing customers so find ways to get your customers to promote what you do, such as a financial incentive in order to find you new business. Companies like Amazon do this very well by creating an affiliate program; individuals promote your products and get paid a commission on every sale.

Referrals are always a really effective way of getting new customers.  76% of consumers cite word of mouth as their main influence when deciding on which product to buy.

The internet makes it particularly easy for businesses to find get referrals because more than a third of social media users have talked about brands online, and four out of five online retailers reported increased sales after adding comment features on their websites and product pages.

If you are selling or marketing online it makes sense to enable ‘social sharing’ on your website landing pages. You can even ask customers to leave a testimonial if you advertize in online directories.

Your aim is to be certain that wherever new customers are likely to encounter you – online or offline – they are able to read something positive about your business that’s been said by another customer.

To encourage feedback offer customers incentive schemes to refer you. For example you could offer a discount when someone introduces a new customer or an invitation to a product launch. Some businesses now use group buying as a way of encouraging people to share discounts with friends and family on social media sites.

There is always something you can offer your customers as a reward for helping you grow your customer base.

 

Missed the earlier posts in this series? Check out: Customer ProfilingLeveraging Existing Customers, and How To Engage After The Sale.

Building Your Customer Base (Part 3): Engaging After The Sale

So far we’ve covered Customer Profiling and Leveraging Existing Customers, now lets look at the art of the follow up.

Continue to engage with your customers – even after the sale!

A common trap many businesses fall into is they only communicating with customers to make a sale offer.  Take time to engage and build a relationship with them first. That way, when your customers are ready to buy, they will think of you first.

There are so many ways that you can do this. For example, social media and email newsletters are excellent for maintaining regular contact. Many small business owners comment successfully to local media via a press release to build their profile. You can even use face-to-face networking as a very effective way of getting to know your customers.

Make it a rule to always offer something of value whenever you have contact with your customers. This could simply be answering questions about your products or services.

If you are a niche business, you probably already share your client’s passion for your product or service. Make sure that passion shines through.

Use Social Media!

  • 70% of Internet users use social media
  • 36% of small businesses use Facebook to engage with customers
  • More than 1 in 3 social media users talk about brands online
  • 1 in 3 small businesses sell online and made over $130 BILLION in sales in 2012
  • Click here for more Social Media Stats for 2013

Building Your Customer Base (Part 2): Leveraging Existing Customers

In Part 2 of this series, let’s dive into some tips about how to leverage your existing customers. As mentioned in my 10 Steps To Growing Your Customer Base post, winning new customers is much more expensive than selling more to your existing clients.


Why you should concentrate on looking after your most profitable customers

There is good reason to concentrate on looking after your most profitable customers: In general 80% of sales come from just 20% of your customers. Figures also prove it costs around 5 times more to get new customers as it does to sell to existing ones.

So it makes absolute perfect business sense to identify your most profitable customers.  By making sure you provide them with excellent customer service, you are ensuring they will remain loyal and to maximize your profits.

Not only that, but they will be much more likely to recommend you to others. Your most profitable customers are the ones who will provide the foundation for the growth of your company. You can increase your profits further.  Knowing the characteristics of these clients makes it easier for you to identify and target prospective customers who share similar characteristics.

Derek Williams, chief executive of The WOW! Awards for Customer Service, highlighted how important it was for businesses to identify profitable customers.  He said: “The secret to growth is to have more customers of the type you want to have, to increase your average sale value and to get them to buy more often.”

 

Building good relationships with existing customers

Communication and good customer service is central to strengthening and building your customer base, but where do you start?

The golden rule of marketing is: Go where your customers are. You could have the greatest idea in the world, but you have to get people to see you. After all, you need to have customers before you start worrying about profits.

For the majority of small businesses, being visible today means having a presence on the internet. According to Internetretailing.net, the IMRG Capgemini Retail Sales Index for March 2013 found a 16% rise in internet sales, compared to the same time last year. In April 2013, Reuters reported 70% of internet users now use social media.

Small businesses have responded well to these statistics by selling online. 36% of them are reaching out to customers through Facebook. Reports in March 2013 show that there are over 15 million brands that have their own Facebook page.

It is well worth doing your homework to find out what channels you should be using to target your customers. A simple way is to ask your customers where they go online.  It is also worth looking to see what your competitors are doing.

Building Your Customer Base (Part 1): Customer Profiling

Time for a blog series on building a customer base! I get asked a lot from clients how to do this, and it’s definitely not an easy answer. A lot goes into building up a customer base, and there are many ways you can approach this. We’ll cover a bunch of ways in this 5-part series I’ll be posting over the next two weeks.

Every business needs a solid customer base in order to be successful. It’s important because customers provide you with revenue. Not only that, but they give you the essential feedback which helps you continually improve your offers and services, and they spread the word to other people about your business and what you do.

None of this happens by accident. Building a dependable customer base takes time and effort. If you want to build your business up on a solid foundation, you need to pay close attention to who your customers are and try to understand what motivates them to buy from you.

Who and where are your customers?

The very first step in building a customer base is to know: Who your customers are, and where you can find them. Once you have this information you can manage your customer relationships by engaging with them more effectively.  This will have the effect of increasing sales to these existing customers as well as attracting new ones.

Customer profiling: What you should know about your customers

Knowing your customer’s key characteristics will help you decide where, when and how to communicate with them.

If you have been in business for a number of years, or you sell to a specific niche audience, no doubt you will already have a good idea about your customer’s general age, location and gender, but there is a lot more information that could be helpful to you.

For example:

  • Do you know the websites your customers visit and what kind of publications they read?
  • What other products and services do they buy?
  • Why do they buy from you and when?
  • What type of customer spends most with you?

If you have just a few customers you could add specific personal information to your customer profiles, such as a buyer’s particular interests.

If your customer base is large and diverse you need to segment them into groups that share similar characteristics and think about the best way to target each group.

Profiling customers this way enables you to better communicate with existing customers and target new customers more accurately. Getting this kind of information could be a simple matter of picking up a telephone and speaking to them. Or it might require a more formal approach such as running a survey in your newsletter or online survey program (we can help you with both of these if you don’t publish an online newsletter or don’t know how to create an online survey.