I was at a couple of meetings yesterday with business owners and it was interesting to hear about how they go about acquiring new customers and build relationships with existing customers.
What struck me most was the fact that neither business owner had any real strategy in place to acquire new customers. I asked them about their marketing messaging and call to action. They hadn’t really considered that properly and just wanted to get something ‘out there’. The methods used were very haphazard, some flyers here, some emails there, they were essentially trying a few things see if they work.
The problem they had, apart from not building a marketing or acquisition strategy, was they had no tracking mechanism in place to understand what channels or messaging was working and which ones weren’t.
The only way they knew if something was working was if they received a direct referral from a customer they had carried out work for. But who was that customer and what work did you do for them I asked. They didn’t know the answer without having to look back through invoices. Did you thank the customer for the referral I asked? Unsurprisingly they hadn’t.
Which brings me on to one of the most important factors in the success of a small or medium sized business – building effective relationships with your customers. One of the biggest challenges facing small business owners is that they are time poor. Most of their time is spent on the actual running of the business so it is difficult for them to take a step back and really think about developing that customer relationship.
In many businesses it is the case that 80% of revenue comes from 20% of their customers so building and maintaining a relationship with these customers is paramount. They are the customers that are loyal, will buy more from you and ill recommend your business to their network of contacts.
But business owners should also spend time putting a strategy together to build relationships with the other 80% of their customers or at least know a bit more about them, what services they’ve bought from the business, when they last visited/purchased a product and in some instances why they aren’t buying from the business any more. Many of these customers may have recommended your business to their social network so even though they aren’t customers any more they are valuable to your business.
It pays to take the time to build a comprehensive marketing and retention strategy around your existing customers. If you can influence these customers to stay with your business for longer and to spend more then you won’t be so focused on acquiring new customers.
But, if you want to acquire new customers you must think clearly about the channels and customer segments you are targeting and the marketing message and call to action you want to communicate.
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