Fact: Your small business needs to grow just to keep up with increasing costs.
Spoiler: Commit time every week to developing your message and execute.
There are several ways to look at this, but for today our focus is on lower cost customer acquisition to increase your customer base. Once you have attracted a new customer, you need to ensure their needs are met so they’ll be satisfied and continue spending with and advocating for your brand. Acquiring retail customers at a low cost, retaining and engaging them will help you create a profitable customer base and allow your business to continue forward.
Acquire Customers at a Low Cost
You’ve likely heard that attracting new customers is more expensive than keeping existing ones. I’ve been told several times that it costs ten times more to create a new customer than to maintain an existing customer and trade publications purport higher multiples. While traditional marketing campaigns are taking a backseat to online and, to a lesser extent, social media all retailers have to be mindful of the effectiveness of their marketing spend since low-cost customer acquisition is key to our success. Focus on finding the mix that works best for your retail business. You will likely use several potentially effective approaches to acquire customers at a lower cost.
One effective way to do this is by boosting your website conversion rates. Knowing what works and doesn’t work for your website—backed up by analytics—is vital to increasing your conversion. Using AB and Multivariate testing will help you identify where to improve while keeping a keen eye on your content creation.
Building a strong social media presence could be an effective way to amplify your message. Please know that it’s not 2005 anymore and social media didn’t turn out to be the marketing juggernaute everyone expected it to be; social media is noisy and expensive today. However, by joining relevant conversations on Reddit and answering questions related to your field, you can position your company as a thought leader in your space. Showcasing strong visuals of your product on Pinterest and Instagram can lead to increased traffic as well. My point is to be focused and contribute.
Retain Loyal Customers
People want to be valued. (Suprise!) Treating your existing customers well means providing excellent service that delights them from start to finish. To do this you will need to ask for feedback to ensure you’re meeting their needs. Giving them a channel to share their thoughts—and then acting on them—makes customers feel like they are part of the process and important and they should be. If you are new to retail, brace yourself because the degree of honesty can be sobering.
Engaged Customers Are More Profitable
Fully engaged customers—according to Gallup data—will go out of their way to locate their favored product or service, and won’t accept substitutes. They are emotionally attached and loyal. As brand ambassadors, these are your most valuable and profitable customers. Gallup’s research shows a powerful link between customer engagement and real outcomes. In the consumer electronics industry, fully engaged shoppers make 44 percent more visits each year to their preferred retailer than disengaged shoppers. During these visits fully engaged shoppers buy more items than they originally intended to.
Research on customer engagement shows that customers make decisions from their heart rather than their head. To engage your customers the key is to create a sense of community. Northwestern University Business School highlighted ways to engage customers and found that Nike is doing it well. Instead of putting all of its resources into a single ad campaign for footwear, Nike now advertises by creating training programs and building online communities around fitness. They also created Nike +, a website designed to make it easy for customers to track fitness progress. You are a small business and don’t have the resources to compile hours of original content and pay billions in endorsements. No, you barely have time to clean the front windows. The point is that people expect more and more and more and how you engage them and how you say what you have to say matters.
As your resources allow, dedicate time to each of these specific customer management areas. The more research you perform on your intended customer the more attuned you’ll become at reaching them and meeting their needs. Gaining, retaining and engaging customers will allow you to realize the profits you need to be successful. Test and monitor. Every dollar is precious in a small business so don’t give Facebook any more of your money than what benefits your business.