John Cradden provides a practical guide to sales and marketing with a view to long-term customer retention.
Sales and marketing go hand-in-hand. Combining these disciplines can result in many moving parts, but they are all in service to a simple, time-honoured, three-pronged strategy for business growth: identifying your target audience, winning them over and keeping them as loyal customers.
Investments in the most slickly produced marketing and advertising campaigns will be lost if all you do is push them out to all your available channels in a scattergun approach and hope for the best. Even the best sales people will struggle to convert leads generated by these campaigns into deals if don’t understand the kind of potential or prospective customer they are targeting.
“As a small business, you are in a better position to deliver on a human level to new customers, and thereby build trust”
Even if you do win new customers, they may not represent your ideal target audience, which in term may make it difficult to retain them – something that could fatally undermine your ability to generate decent profits.
You’ll probably have heard of the familiar statistic that acquiring new customers can be four or five times more expensive than retaining current ones, but more interesting is recent research showing that improving retention by just 5% can drive profits up by over 25%.
So what’s your best approach to identifying, winning over and retaining your next customer?
Know your product or service
It might seem obvious, but being able to articulate clearly who you are and what you are providing is the most fundamental starting point for any sales and marketing campaign. What need or issue does your product or service address? Understand the benefits but also the limitations.
Find out about your current customers
Your current customers should tell you something about your target audience. If they are loyal and return again and again, then you have fulfilled an important need. If they’re not, then they can still help determine what kind of customers are worth putting time and effort into targeting.
Segmentation
Using the data on your current customers but augmented by some market research, start segmenting your customers into groups on the basis of demographic, behavioural and psychographic traits. Demographic data groups customers by factors such as age, gender, income, education and geography. Behavioural data groups customers based on how they interact with your brand, such as the number of times they’ve purchased from you, how much they’ve bought, how long it takes to purchase, etc. Psychographic traits are similar to behavioural but go a bit deeper into target customers’ lifestyles, interests, hobbies, values, personality and behaviours when seeking services or products.
Understand your competitors
A SWOT (strengths, weaknesses, opportunities and threats) analysis of your competitors will help you define your place in the market and positioning strategy. Focusing on the people that your competitors are not targeting will help you define your target audience.
Generate customer personas
Bringing together the information from your competitor analysis with your demographic, behavioural and psychographic traits will enable you to build customer personas that can help you visualise your target customer and adjust your sales and marketing campaigns accordingly.
Communication
Once you’ve made meaningful contact with target customers, winning them over is almost all about communication. Stay in constant contact, get them to follow you on social media, or find ways to engage with them that suit their needs, such as through email newsletters, surveys, webinars and videos, and listen to what they have to say. As a small business, you are in a better position to deliver on a human level to new customers, and thereby build trust.
Build your customer experience
This goes a beyond pure sales and marketing, but a good chunk of customer retention is about creating a good customer experience, and boils down to:
- Good customer service – responding to and resolving customer queries in good time.
- Creating a personalised user journey – using data on your customer’s interactions and preferences, customise your communication, offers, and services to suit them.
- Using tech in a smart way – to enhance user experiences and improve day to day interaction with customers, such as chatbots and AI-driven recommendations.
Create a customer education programme
Depending on the type of business you have, you can create platforms for educating your customers, such as forums or knowledge databases and how-to online video series – all things that can help customers stay engaged with what you do.
Customer testimonials or reviews
Get in touch with your most loyal (and happy) customers and explore ways to highlight their stories of how they benefit from using your product or service. Do it well and publicise it and it’s good exposure for them as well.
-
Bank of Ireland is welcoming new customers every day – funding investments, working capital and expansions across multiple sectors. To learn more, click here
-
Listen to the ThinkBusiness Podcast for business insights and inspiration. All episodes are here. You can also listen to the Podcast on:
-
Apple
-
Spotify
-
SoundCloud
