“Thank you for your business. Hope to see you again soon.” How many times have you heard that in your life as a consumer? As a business leader what irks me most about that statement is the word “hope”. Hope is not a business strategy, yet our team members use it as a parting gesture as our customers are leaving our business for what could be the last time. If we allow the customer to walk out of our business without securing some way of staying in contact with them, they soon can become one of the forgotten.
When you have customers who have bought from you, doesn't it make sense to find ways to get them to return again and again? If you're not doing this already , start here...
I don’t know about you but I work hard and invest money to attract customers to my business. This investment is also known as an acquisition cost. And as far as attracting customers to a business, it’s not cheap. When you take into account all of your marketing costs, the cost of the product or service provided, any discounts you may have offered to attract the customer, and your business’s overhead costs, chances are you may not have made enough money on that sale to breakeven.
So wouldn’t it make more sense to implement several strategies that would entice that customer into coming back to your business to buy more, and more often? When a customer continues to purchase products or services from your business we refer to that as the lifetime value of a customer. It may initially cost your business to acquire that customer, but chances are great that each and every time they buy from your business, each transaction will have a nice profit margin.
With the proliferation of frequent buyer programs, loyalty programs, online discounts, social media memberships and the like, big businesses understand the concepts of acquisition costs and lifetime value. They know that it’s cheaper and easier to keep a good customer than to attract and convert new customers. So they go the extra lengths to collect a customer’s contact information and they build a database. With a database of customers who have bought before, they can then maintain frequent contact with them by making offers and educating them; giving the customers reasons to return to their business next time. They continue to remind their customers they haven’t been forgotten.
So it’s a mystery to me as to why so many small businesses miss out on what would appear to be such a basic business strategy? I’ve worked closely with over a one hundred small businesses over the years and the vast majority has not done a very good job communicating with their customers. Many have a database of sorts, often not very organized. These small businesses haven’t a clue as to the amount of potential sales that reside in their database, and usually haven’t a clue on how to mine the revenue sitting right there on their own computer system. Instead of marketing to the very people who have purchased before from their business, they market to the masses. They spend money endlessly trying to attract and convert those who probably don’t know their business and may not even have a need for the products or services it provides.
Now before you dismiss this strategy as something that doesn’t apply to your business or won’t work because your business is “different”, let me stop you right there. Whether your business caters to consumers, B2C, or to other businesses, B2B; or whether your business has a product or service that is purchased frequently, or very infrequently; building your database and mining your database is absolutely the key to creating more lifetime value from every customer who purchases from your business.
Your challenge now is to decide what messages you want to deliver to your database and how you will deliver those messages. I guarantee you though; customer loyalty and how they spend their wallet-share will be influenced when you continue to let your customers know they haven’t been forgotten.