19 May Want More Customers? Forget Customer Acquisition (Yes, Really!)
Guest Post by Jenny Hayward of Signpost
Ask any business owner what their main goal is, and most often they’ll respond with some variation of “getting more new customers through the door”. Although customer acquisition is essential to the growth and sustainability of any healthy business, far too often owners throw themselves full-force into this endeavor when their efforts would be better spent elsewhere. Repeat customers spend 33% more than new customers, proving greater returns can be enjoyed by investing in customer engagement and retention. Focusing on building relationships with your current customers will not only bring more value to your bottom line, but will also contribute towards customer acquisition goals as well.
Relationship-Building Brings The Most Value To Your Bottom Line
Fostering customer relationships should already be a pillar of your customer service approach, but it’s also the most strategic use of your resources. A new customer converts at 5-10%, but a repeat at 60-70%, so when you double down on customer engagement strategies you’ll be able to reap the rewards. Employ high-ROI mainstays, like email and SMS marketing, in order to keep the conversation going with customers between visits, keep them notified of new product, services or promotions, and your business will stay top-of-mind. As always, bear in mind best practices for both. You can also take it one step further and create a formal loyalty program (if applicable to your industry, of course).
In addition to comprising a majority of your revenue, repeat customers provide even more value in terms of word-of-mouth marketing. Better yet, gone are the days when this approach was treated like a nebulous, untrackable, unmanageable force. A majority of today’s word-of-mouth is no longer generated via mouths, but rather is digital and lives mostly online, so you can create a strategy around it that will amplify your results. The happy customer base that you’ve been serving and strengthening bonds with over time makes a great foundation for these efforts.
Identify Your Brand Advocates By Sending Feedback Requests
Identify your brand advocates by sending feedback requests. Finding out whether or not a customer would recommend your business is a great way to gauge their satisfaction with your company. If they would recommend your business, allow them to explain why or what it is that they appreciated. This is great fodder for creating testimonials that can help with customer acquisition. Always ask permission before you repost or share any customer quotes or reviews. Adding quotes from customers to a prominent place on your homepage can lead to a 34% increase in sales.
More importantly, you can tap these advocates to leave you positive reviews on third-party review sites like Yelp or Google My Business. Today’s consumers are more educated on products and services and like to do their due diligence before committing to buy. This research often starts or ends with online reviews. In fact, 88% of customers trust reviews as much as personal recommendations, making these powerful tools in the buyer’s decision-making process.
Leverage Your Business’s Biggest Fans to Drive Reviews
In addition to optimizing your website as well as outfitting your office or storefront with reminders and links to these profiles, you can tap this new batch of brand advocates in this pursuit of reviews. Send check-in emails or text messages that have a button linking to your profile on these third-party sites, and remind them how important reviews are to your business. A recent Harvard Business School study found that an increase in rating of just one star can increase a company’s revenues anywhere from 5-9%, so the more current, positive reviews your business has, the better!
Reviews are the holy grail when it comes to word-of-mouth marketing. Unfortunately, far too often business owners treat them as exactly that, elusive gifts that are bestowed upon a business instead of a revenue-generating tactic that requires a comprehensive strategy. The most challenging part seems to be the intimidating “Ask”. However, this critical request is integral to motivate advocates. Despite 83% of customers reporting they’d refer friends and family to a business following a positive experience, only 29% actually do. While there can be a myriad of reasons for this gap, most commonly it just doesn’t occur to them to make the referral.
Cultivate a Referrals Mindset
Be sure to plant the seeds early, and in the case of large, long-term projects work it into initial negotiations. Either ask in person and follow up via email to provide more information on what a good, target customer looks like for you and the ways in which your business differentiates itself from the competition. You can even prepare this ahead of time in a convenient reference sheet to share with clients. Include a line asking in your email signature, along the lines of, “Know someone else looking for quality flooring? Refer them today and you’ll both get $50 off your next project!”
To do this, put together and formal referral program and offer some sort of discount or free gift for either party or both! These can range depending on your business from a keychain to a gift certificate to a favorite restaurant in town. Don’t be afraid to get creative and test to identify what best motivates your audience. Not only are these referred parties four times more likely to buy, but they also bring a lifetime value (LTV) that’s 16% higher than other customers. A majority of new business already comes from referrals, so with a well-conceived plan, you can have even more of your happy customers do the selling for you!
What can your business do to better leverage its customer network?
Reviews, testimonials and referrals all lead to new customers by aiding in discoverability and brand trust required to make important purchasing decisions in 2016. What else do they have in common? They all rely on developing relationships with current and past customers. Investing in this repeat business, will not only yield greater returns for your bottom line, but also help you to drive these tactics and generate new business!
Jenny Hayward is the Content Marketing Manager at Signpost. With over 6,000 customers, Signpost’s Mia is the future of communication for businesses with consumers. Powered by automated data collection and email remarketing, Mia’s artificial intelligence drives 5 star reviews, new customers and loyalty.