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From knowing your unique selling point to keeping your finger on the pulse, six ways to find and keep customers.
Customers are fickle things. Unless you are one of the global mega brands – McDonald’s, Apple or BMW, for example, loyalty, it seems, is only as strong as the last sale. This is why attracting and – crucially – retaining customers has to be a top priority for any small or mid-sized business.
The secret, according to those in the know, is to understand what attracts your customers in the first place. What is it about your business that sets it above the competitors? In the terminology of the business textbooks, what is your unique selling point (USP)? Whatever it was that initially wooed your customers will keep them coming back for more.
“Visibility is key,” says Mr Orvis. Whether it’s signage, online presence or a social media profile, you have to be easily found. After that comes the price (and how competitive that is) linked to quality. People will pay more for better goods – it’s all about value for money. Finally is the feedback from other customers.
“If you are seeking repeat business – and to stimulate word-of-mouth recommendations to attract new ones – it’s essential you offer the best service and make sure social media comments are good. If there is a complaint, put it right straight away,”
Each year the average business loses around 20pc of its customers simply by failing to attend to customer relationships, according to the business consultancy Marketing Wizdom. Whether sales are on- or offline, it’s a far more cost-effective strategy to retain customers than win new ones. With a solid returning customer base, any customer acquisitions will result in sales growing.
“In the first year of business, looking after newly won customers should be the cornerstone of sustainable growth – they are your biggest advocates for new customers and the reason you have been able to kick-start your business,” says Nick Leech, digital director at 123 Reg.
It’s easier with online sales, with the myriad associated analytics tools, to see who is buying what and when. But even with off-line sales you can measure all sorts of metrics to monitor and address potential pitfalls.
Knowing customer trends and keeping the offering fresh and appealing is a major component in customer retention, adds Mr Orvis. A good CRM package can prove invaluable for keeping tabs of customer habits and patterns.
It’s a bit like job-hunting: a one-approach scattergun tactic rarely works. So it is with winning and retaining customers – you have to target, says Vikas Shah who, as well as being CEO of Manchester-based textiles trader Swiscot Group, is also visiting professor of entrepreneurship at MIT’s Sloan School of Management in the US.
“One of the most common mistakes SMEs make is that they take a far too generic approach. Producing literature and blasting it out to potential customers won’t work even if your product is standardised,” says Mr Shah. “You have to know who your customer is and the reason they will buy. Do your research and find out who, in reality, is the decision maker.
“For example, if you are selling IT products, you might think the person to approach is the CTO [chief technology officer]. But this may be a small business where the founder holds great sway – you need to target him or her.” That’s primarily true of B2B sales, but the ethos holds true of B2C as well. “You have to understand what the problem is in your customer’s life that you are attempting to solve. What value are you adding?”
“If you want to make serious money over the long term, your customer-acquisition costs have to be low and the lifetime value of that customer has to be high,” adds Prof Shah.
“The only way to achieve that is to be super-efficient and targeted, with the wraparounds such as upselling and customer service. Aim to be really effective.”
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