How Much Value Do You Put In Your Current Customers
So much time and money is put into the acquisition of new customers but I commonly find that a lot of businesses do not put the same amount of effort into their current customers.
This can often lead to customer churn and a constant battle of bringing on more new customers than those lost in order to get growth.
If a business has a good process to manage and nurture their current customer database, then this is likely to grow sales outside of new customer acquisition. It will also assist in lowering customer churn, and less customers dropping off means an overall increase in revenue.
Here are some easy ways to make sure you are making the most of your current customers:
- Invest in some software to effectively manage your customers. There is some really good free Customer Relations Management (CRM) software out there, but they can be quite limiting. Trial some and ask around to see what might be best for your business.
- Implement internal systems to capture the right information you need on your customers. Think about what you might want to know at any given time. For instance, if you have a number of different services in your business, it would be valuable to know which customers are buying what service and how much they are spending.
- Categorise and label your customers. The adage that all customers are equal is simply not true. In order to understand who your most valuable customers are, you need to place them in value groupings. A simple example might be Gold, Silver and Bronze. You might determine these by how much they spend or frequency of spend, or maybe a combination of both.
- Develop a strategy for each customer on how you might sell them more. For Gold customers, there might be an opportunity for them to buy a different service that you offer. For a Silver customer, there might be an opportunity to consolidate more spending in one service from other suppliers, which would push them to a Gold. For Bronze, it might be that a lesser service option is appropriate for the amount they purchase from your business as they might not be loyal to you and cost you a lot of money to service.
- Develop a system for managing each customer in each group. For instance, a Gold customer might get a face to face review each quarter, you may take them out to dinner or lunch every 6 months. A Silver customer might get a review meeting every 6 months and you shout their team morning tea once a year. You discount levels, if any, may be different for each group.
- Develop an effective communications strategy for each group. For examples, news letters, blogs, promotions etc. This may be the same across all your customer base, but you may have different messaging you want to get to different groups
- Most importantly, have a system where you identify any customers that stop spending with you or decrease their spending. If you don’t notice this and respond to it, then you have just confirmed to that customer that you didn’t care about them. The earlier you can notice, the more opportunity you have of getting them back, if that is an option, or at the very least understanding why they are leaving you so you can address any issues internally.
You can spend a 1/3rd of the time and money on your current customers as you do on trying to acquire new customers and sometimes get better results. Customers are currently loyal to you because they love your product or services and the way you make them feel. Don’t give them a reason to doubt that loyalty.
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