Profitable Customer Relationships: Five Steps to Improve and Grow Them Free Article
May 1st, 2009 | Categories: Marketing
The U.S. marketplace is changing and so is the business-customer relationship. Today’s customers are in the driver’s seat. Technology, the Internet and social media have opened up the customers’ world to information and their ability to choose what, when, and how they make purchases. Customer loyalty is challenged every day and there is little pain in change for the customer.
The 80-20 rule applies to customer relationships: If 80% of your revenue comes from 20% of your customers, you know this 20% will likely remain loyal. You meet their needs consistently and they are generally happy. But, what about the other 80%? What do you know about them? For that matter, what do you really know about your loyal customers?
The business with a higher retention rate grows faster. What would you do if you knew more about your customers? We’ve found that businesses fall into five categories in what they know and how they respond to customers: 1) doing by knowing, 2) doing is hit-or-miss, 3) doing knowing little, 4) doing without knowing, and 5) doing to do. In a recent survey conducted with the American Marketing Association, Minnesota Chapter, we learned that only a small percentage of businesses (7%) “do by knowing.” The majority of businesses carry out marketing initiatives knowing little about their customers, or their marketing is hit-or-miss, largely due to little understanding of the customer information they have or how to sync up that knowledge with their marketing messages.
Here are five basic steps to improving your customer relationships and move them toward profitability:
1. BREAK from letting your needs and wants guide your marketing choices. It is no longer about you, but about your customers. Listen to them.
2. Look at your EXISTING customer demographic and transactional information from 30,000 feet up. It’s time to put that demographic and transactional information to work for you. Segment the information by gender, age, location, most purchases, one time purchases, best customers, etc. Identify what’s missing.
3. Leverage existing TECHNOLOGY to learn more about your customers. Uncover ways to gather additional information about your customers. Be creative. Put a poll on your website. Ask a set of questions as part of your online check-out process. Send a weekly survey to customers who made recent purchases to gauge their satisfaction.
4. Never, ever, EVER send an email, post to social media, mail a news- letter, write an article, or submit a press release just for the sake of doing it. Go back to your gathered customer information. Target your market and craft your message accordingly.
5. ALWAYS pay attention to the results of your marketing initiatives and what customers tell you. If you’ve entered the social media realm, stay on top of what customers say. Your marketing efforts should be worth measuring if you’ve carefully targeted your audience and crafted your message.
Growing profitable customer relationships is within reach for any business. You just have to listen to what your customers are telling you. Now act!
