Acquisition, service, growth and retention are four important areas to focus on if you want to grow your customer base for increased profit and long-term growth.
Many businesses only think of acquiring more customers, employing telemarketers and buying leads, when in fact these are only some ways of growing the customer base.
Before we discuss the strategies, there’s something you need to do first that many business owners fail to do – understand who your ideal customer is. This isn’t based just on dollars spent, geography, demographics and basic info. Success occurs when you tap into the attitudes, values, beliefs and behaviours of your ideal customers.
HOW TO IDENTIFY THE IDEAL CUSTOMER
Step 1: Look at your existing customers and see what’s common about them in the areas of attitudes, values, beliefs and behaviours.
The ideal customer characteristics may include nationalities, sex, race, age and education levels. Look for similarities in how they think, act and behave.
Step 2: Determine who is the most profitable. Profitable can come in a number of forms – number of transactions, lifetime value of the customer or the revenue generated.
Work with your accounts person to find the type best suited to your business. If you’re going to spend time, money and effort acquiring new customers, they might as well be the profitable ones!
Once you have a clear ideal customer profile, you can then consider the following areas to create a customer-based business strategy.
Get new customers on board (‘onboarding’)
Churn is a big problem for businesses. If you can get a new customer on board you reduce the risk of losing them by 50 to 80% depending on your business and industry.
The key here is spending time with your customers post-sale to ensure you understand them and their expectations.
A new customer survey will help you understand them better and build customer retention. It also exposes any flaws in the sales process they went through and, if required, what you can do to recover.
Customer-based service is not about you. It’s about what the customer thinks high-level service is. You need to understand what’s important to the customer – focus your service and delivery on that.
Customer segmentation is important in this area of growth because each customer type will have different expectations of your products and services and staff delivery.
The easiest way to work this out is to survey your existing customers. You can do this in little sound bites as the customer interacts with your company at many of the ‘customer touch points’.
You want to grow with your customers as they buy more, recruit their friends for you, take less of your company’s time, aren’t as sensitive to price, and don’t cost as much to acquire.
Customer loyalty drivers help with customer ‘stickiness’. Some customers won’t snap up loyalty program as it may not be important or add value to them. However, if one area of the business isn’t delivering the primary need the customer has, the loyalty program you’re offering that’s sent them a gift voucher, a discount or an incentive, may be the strategy you need to have them come back for repeated business.
Retention is the most under-utilised strategy in growing a customer base, perhaps because it’s perceived by business owners to be harder to do. You’ve worked hard to find the customer, win them over and all you have to do now is keep them.
Keeping them means your business needs to be organised. If you are continually a ‘one-hit wonder’ with your clients you churn through them fast, and everyone, including your employees, get disillusioned as there is no real future for customers coming into your business. There will always be new faces and deep solid relationships between your employees and customers will never develop.
Source: Business Australia