Image Credit: ActionCOACH
Some business owners scoff when I suggest it’s possible to double one’s customer base in a single month, but I honestly believe it’s because most set their expectations too low. For some reason, people seem to only expect growth in line or slightly about the rate of inflation, so they believe they can get a 5% increase in their customer base, or maybe 10%, but they think 100% is impossible. If you change the way you think, however, and take action, you’ll realise that it is very doable. Here’s how:
1. Build a “loyalty ladder” and create raving fans:
Loyal customers are ideal customers. They bring you repeat business and once they’re at the point of being “raving fans”, they can’t stop talking about your business, so they end up sending you referral business too.
Building a loyalty ladder means coming up with some sort of formal loyalty programme, whether that’s offering a loyalty card or VIP membership, and then incentivising your preferred customers in some extra way to make them feel special. You then move people along this loyalty chain by ensuring each interaction with you is superb and exceeds their expectations, and rewarding them for repeat business so that they begin to be cheerleaders for your business.
2. Identify a target market for a clever direct mail campaign
People don’t often get snail mail anymore, so if you can make your mail interesting (i.e. it shouldn’t look like a spam advert or a bill), direct mail can be very effective. Direct mail campaigns work best for reaching a specific consumer demographic, rather than a “spray and pray” approach where you send out thousands of mails to anyone of everyone, and hope for a response. Unlike broad methods of advertising that hit everyone within a given geographic area, direct mail works best when it arrives at the doorstep of those consumers who are already known to be great candidates for your product or service. For example, if you run a management consulting company, you probably need to be targeting people who would benefit from your services, which means the decision-makers in a business, rather than entry-level employees.
At ActionCOACH, we do what we call “lumpy mail”. We hand address the envelopes and put something interesting inside to raise the recipient’s curiosity. For example, it might be a teabag, with an intro along the lines of, “Make yourself a cup of tea – you’re going to want to spend some time mulling on this offer for your business.”
Direct mail should be short, to the point and include a call to action, whether it’s “bring this voucher into the store for a 15% discount on your next purchase” or “take advantage of this special offer available until XX date”. It’s also important to only send out as many mails as you can follow up on, and then to do follow ups. Using the teabag example, I will call the people I sent the mails to, and instead of it being a typical cold call, I’ll start the conversation with, “So, did you enjoy that cup of tea?” It gives you an entry point into a conversation, which can then lead to a sales opportunity.
3. Create a formal referral programme
Design a referral programme that rewards customers for bringing others into the customer base. For example, if your business is a spa, you could offer your client R100 off their next treatment if they bring in a friend with them (the friend pays the normal rate). Referral rewards can be in the form of discounts, gifts, invitations to special events, or “closed door” sales events where only certain customers are invited to participate and take advantage of savings, exclusive products, or other preferred customer perks.
4. Get rid of your worst clients and cater for top clients
Many business owners balk at the thought of letting go of any customers. Yet most could benefit from weeding out their worst clients (the ones who are difficult, don’t pay on time, always complain and give you 80% of your headaches, but only 20% of your income) and focusing on doing more business with their top clients.
Rank your clients from A to D (with A being the best and D the worst), get rid of the Ds and you’ll have more room for A clients. Start by identifying who the best customers are by applying the “80-20” rule, which states that 80 percent of a company’s business comes from 20 percent of its customers. Treat those customers particularly well and invest extra energy in satisfying their needs while extending service above and beyond the call of duty.
Figure out ways to move your C and B clients towards becoming A clients and ditch the Ds (either by suggesting that if they are unhappy they consider doing business with a competitor, or by sitting down and discussing the fact that the business relationship is not working and seeing whether the issues can be resolved or it’s better to part ways).
5. Create strategic business alliances
I find that many business owners say they do this, but don’t actually formalise the alliances. By partnering with other businesses with which there is a common customer demographic but no actual direct competition, a company can expand its customer base quickly and easily. Those customers who trust other businesses and have proven their loyalty to them will be inclined to follow their recommendations or perceived endorsements of an alliance partner. As an example a stock broker and a luxury car dealer may share a similar target market, and can send each other referral business. The stock broker might be able to send his top clients an invitation to the exclusive launch of a new vehicle, while the car dealer could offer his top clients a free first consultation with the stock broker. Both are offering value to their clients and sending the partner potential business leads.
6. Consider advertising
Getting the word out through mass media is often the only thing necessary to vastly increase your number of customers, but many business owners mistakenly believe that they can’t afford advertising. But if you re-look the possibility, you may be surprised. The problem may be that you’re looking at the “big” publications or radio stations. You might not be able to afford to flight an advert on Talk Radio 702 for example, but advertising on your local community radio station might well be within your budget, and directed at a target market within your specific geographic region.
Make sure you advertise where your target market “hangs out”. For example, instead of spending an inordinate amount of money on one small ad in the Sunday Times business section, it might be more effective to spend the same amount on regular, larger ads in your local community newspaper or a targeted magazine that your customers will be reading.
7. Train and support your employees to improve their skills
Business owners say they spend time training and up-skilling employees, but many don’t do as much as they could without much extra effort. It can be as simple as changing the words your salespeople speak when customers arrive in your shop. Instead of opening with, “Can I help you?” (to which the response is often, “No I’m just looking”) you might get them to ask, “Have you been in the shop before?” The answer then guides the salesperson in the direction the conversation can take. If it’s “yes”, the response might be, “Thanks very much for coming back to visit us again. Is there anything particular you’re looking for?” A “no”, on the other hand, leaves room for something along the lines of, “Welcome then! It’s lovely to have a new visitor. Let me quickly point out where all the different sections are…”
Of course, it might require more time, money and effort to get your employees more effective in growing your business. They might profit from attending sales or marketing workshops, for instance. Wine reps for major wineries often travel to Europe to learn more about wines at the company’s expense. Construction companies send carpenters and electricians to evening courses to get advanced certifications. These investments all pay off when those employees return and land lucrative new accounts, do a better job, or are able to charge customers a higher rate for more specialised service.
8. Improve the conversion rate for leads and contacts
The best way to grow your business is to quickly convert new leads into customers. To do this, you need to measure your current conversion rate by looking at the number of leads you have over a set period (say, a week or a month), and then how many of those are generating actual business sales. Let’s say you sell tyres. Every time someone calls or walks in, make a note of what they wanted and whether they ended up buying tyres or not. You may be dismayed to learn that your conversion rate is lower that you think – perhaps one in five. Once you know this rate, work on improving it – it takes less work to convert a lead (someone who is already interested) into a customer than it does to find new leads.
If the current conversion rate is 20% for every 100 contacts or leads, that translates into 20 new customers a month. Boost conversions to 30% and that represents a 50% increase without doing any extra marketing or advertising.
9. Convert customers to multiple purchasers
Instead of focusing on finding new customers, it’s often easier and more effective to get someone who has bought from you once to do so again by up-selling or cross-selling, for example. The example I always use here is how few restaurants take down your contact details while you’re there for a meal. There’s one that does in Pretoria, though. They explain that they run various events, such as wine pairings or hosting guest chefs, once a month, and ask whether you’d like to be kept informed and invited. This gives them an opportunity to capture your contact details and send you enticing offers that are very likely to get you to visit again. Think of how you can implement this idea into your own area of business – how can you ensure every customer becomes a repeat customers.
10. Make use of digital marketing
Create a website and focus on using your digital presence to drive people to your physical location (if you don’t offer the option of online purchases). Your website acts as a shop window that never sleeps and a business presence that extends around the entire world almost overhead-free.
Give site visitors something valuable in exchange for them providing more information about themselves. They sign up on the site or visit the store, for example, and are rewarded with a discount, contest entry, or a free consultation or service upgrade. Make incentives irresistible and continue to emphasize a call to action, otherwise Internet surfers will never convert into useful leads and real customers.
11. Increase your visibility
Brand recognition is powerful. That means you need to ensure your brand is consistently portrayed on every platform and that it’s recognisable and professional. Maybe you had limited budget for corporate identity when you started out and did it on the cheap. Now may be the time to invest in a quality logo and brand design, and then use it at every opportunity. Don’t use generic shopping bags when it is possible to put a business logo and tagline on them. If you’re planning on gifting your clients, make sure the gift is branded. Have your staff wear uniforms with logos on them and brand your delivery vehicles.
Harry Welby-Cooke is the Co-Master Franchisor for ActionCOACH in Southern Africa. The fastest growing and largest business coaching company globally. Harry developed ActionCOACH across South Africa which now boasts 35 franchisees. He is also a certified, leading Business and Executive Coach. He has successfully assisted countless business owners to significantly grow their profits and develop their entrepreneurial skills.