‘Designing Strategies’ newsletter
September – October 2006 Volume 3 – Issue 12
Image: freedigitalphotos.net | dream designs
Is your customer base eroding, and your market share declining? Neither situation is unusual. Every year, most businesses expect to lose some customers and hopefully gain new ones to replace them. But, are you finding the percentage of customers leaving you for your competitors is extremely high? Or, is the number of new customers not significant enough to replace lost customers? The solution is to fill our contacts list with loyal and profitable customers to stop the decline
There is always room for more loyal and profitable customers
The ideal situation would be for all of our customers to be wonderful, low-maintenance types. Better yet, they would purchase enormous quantities of our most profitable products. Loyal and profitable customers just make life simpler. It would be fabulous if we could clone our very best customers, and let less reasonable, low profit customers go to our competitors, challenges, headaches and all. If only it were only a perfect world!
Close your eyes and visualize this perfect world: nothing but wonderful, loyal and profitable clients. Sounds nice, doesn’t it? Everyday is a good day. You can set your compass for that direction. First, decide who your ‘A List’ customers are, the most loyal and profitable ones. You probably have most of the data you need to identify them right now. Pull it up, organize and analyze it.
Review all of your customers for the past year, three years or even five years. How many have been around for the long haul, continually purchasing significant amounts of products or services from your company? Those continually making large purchases aren’t necessarily your best customers. Nor are they necessarily loyal customers if low price is all they look for. What specific products or services do they purchase, those with low or higher profit margins? Has your business relationship been profitable? Determine your loyal, profitable, low-maintenance customers, and chart a course to keep them and get more like them.
Planning to acquire more of those loyal and profitable customers
How do you allocate marketing and advertising budgets in your strategic plan? If all of your dollars are spent to only attract new customers, you are missing something important. You should also formulate a marketing strategy to reach and remind loyal customers why they do business with you. Remind them, and other potential customers, of the value and rewards you provide that your competitors do not.
Your ‘A’ customers need to know you value them. Develop a customer retention strategy with tactics focused on showing loyal customers how much they are appreciated. Perhaps a ‘rewards’ program of some sort would be appropriate. Often something as simple as a personal note, email or follow up phone call from the company president can go a long way in letting the client know how important they are to you. Find out whom they know that might become another one of your loyal and profitable customers. Plan and develop a strategy to capitalize on this important business asset. Your success depends on it.
How can you use ‘loyal customer equity’ to the best advantage? Obviously, you are doing something well to keep them loyally coming back time and again for your products and services. Remember that basic, important question: “Would you recommend us to a friend?” No one but the most satisfied and loyal customer would answer that question ‘Yes.’ Find out why.
Show your appreciation and the value you place on these loyal customers. Let them know how much they, and their opinions count in your success. If you haven’t taken your web presence to the Web 2.0 level yet, now is the time to do it. Implement on-line surveys, blogs and private ‘members only’ chat rooms to interact with valued clients. These methods can help glean valuable information from your best, most loyal customers. Ask what you do well, and what could be improved. Ask what products or services you might add to your line. If you are not asking for personal referrals from this prized group, why not?
The greatest, yet easiest thing you can do to take advantage of this brain trust is to simply listen. Ask for their feedback, listen to their responses and use it in your planning. Get the message directly from the horse’s mouth and run with it.
