Trying to figure out your marketing mix? When you first launched your business, you likely focused most of your energy on reaching new target markets, establishing your clientele, and building market share. As your business grows, however, you’ll find that you’ll need to shift your focus from just acquiring new customers, to retaining your existing customers.
If you’re looking to grow your business revenue year after year, selling more to existing customers is a cost-effective way to go. Getting repeat business costs less than getting new business; consider the costs of advertising, networking, offering a “free consult”, or other incentives to new markets. And, there’s the risk new leads won’t buy.
Developing a strong relationship with existing customers can turn them into loyal customer evangelists; that is, they don’t just buy from you, but they also tell others about you and help increase your sales with the passion of their referral. Here are some ideas for creating customer loyalty.
Align the “Four P’s” for Customer Retention
- Have you added new products or services? How do they fit in your original product or service offering? Do they meet the needs of your current customers, or open new markets?
- Evaluate your pricing strategy. Have you priced yourself out of the market? Can you increase your prices without affecting sales? Or have you low-balled your prices to gain market share? Typically it’s more difficult to raise prices than to lower them; can you offer new features or benefits that can justify a price increase?
- Assess your current target markets. Are you effectively reaching your target markets and fulfilling their needs? Are the markets you’re serving profitable? Can you expand into new markets? Sometimes you can find a niche market that has been overlooked by other businesses.
- Look at your promotions and positioning strategies. Can you allocate more of your budget to promotional campaigns, or find new, creative ways to promote your business? Does your brand image still reflect what you want your business to be?
It’s All About Creating Customer Loyalty
- Superior customer service. In a world dominated by big box stores, people are looking for more personalized service. Your customers will appreciate professional, knowledgeable, friendly, and reliable service, before, during, and after a purchase. Giving great service and finding solutions to meet your customers’ needs go a long way in keeping their loyalty, year after year.
- Excellent quality. You’ve probably heard the expression “you get what you pay for.” Competing on price alone isn’t sustainable. A much better strategy is to compete on quality, or to provide enhanced features or benefits that are valued by your customers.
- Loyalty programs. Let your customers earn points or rewards when they buy your products and services which they can redeem for free merchandise, or more products and services. By rewarding your regular customers, you can encourage them to buy from you instead of your competitors.
- Memberships. Have customers sign up for a membership program to receive newsletters, advance notice of sales, special buys, extra service, invitations to special events, or rewards.
- Credit programs. Give your customers different purchase options such as store credit cards, layaway plans, buy now/pay later, or pay-as-you-go plans.
- Contests and prizes. Contests can create excitement and promote in-store purchases, program or membership sign-up, and refer-a-friend campaigns.
How to Increase the Value of Your Products and Services
- Bundle your goods. Depending on the type of product or services, you might benefit from seasonal promotions and volume pricing, or by bundling your products with other services.
- Create alliances. You can partner with other businesses to provide complementary products or value-added services to your customers.
Gear Your Marketing Efforts Towards Winning New Customers
Successful companies work on increasing the spending of loyal existing customers, as well as finding new ones.
You need a steady stream of new customers–especially if you want to see significant increases in your sales. No matter how loyal a customer is, it’s pretty hard to continue growing year after year without new customers.
So, focus your energy and money on making sure you attract the right type of new customers: the ones who could potentially become passionate customer evangelists like those who’ve helped grow your business to this point.
Here are some ideas for attracting the right customers, both existing and new:
- Network, network, network. Get out and meet your customers as much as possible. Always have your business cards and marketing materials with you. Be ready with your 30-second “elevator speech.” Remember, you are always representing your company, no matter where you are or what you’re doing.
- Get your voice heard. Write press releases, provide story ideas to the media, write a blog, create a website, write articles, and speak at industry associations or networking events.
- Try new and creative media. You might consider social media such asFacebook, Twitter, or YouTube to promote your business and to attract new customers.
- Encourage third-party endorsements. Ask for testimonials, work with your alliance partners to jointly promote your businesses, and reward your customers for referring new customers.