There are three important marketing fundamentals that every business needs to follow.
As a business you have to:
It doesn’t get any simpler than that.
You can complicate it all you want (and a lot of people do), but marketing success comes from these 3 fundamentals. How well you know your customer, your product and your business the more successful you will be in marketing.
You’ve heard of the axiom that “your employees are your most important asset”. Yes, that is true, but in today’s world of social media and technology your customer is your most important asset. Without customers your company would not be able to pay your employees. That makes them a more important asset.
People would argue that customers are not an “asset” because you don’t own them. Whereas employees you do “own” because they come with an employment contract (real or implied by law).
We could argue these points all day – but with internet, social media and smartphones, customers have a significant impact on business – both good and bad. They can be your most powerful brand ambassadors or your customer service executioner. Reputations can be destroyed overnight from a single YouTube clip as much as sales can soar from one tweet.
What is “know your customer” ?
Knowing your customer means to strive every day to understand them more. Learn why they buy from you, where they come from, who they are and how many you have. These are just starters. The list goes on. The point is that the more that you know about your customers, the better your customer marketing strategies will be.
Customer Marketing Strategies
When comes to customer marketing strategies there are only three types.
Every marketing strategy and tactic falls into one of these three types.
Retention strategies help to keep the customers you have. If you do not have retention strategies you will begin to lose customers. You can’t stop that. Customers leave. Retention strategies consider many aspects of your products and business and must be part of your marketing mix.
Growth strategies keep your business profitable. The more that your business grows the more customers you will have. Growth strategies enhance the business with your customers and stronger customer relationships builds a stronger business.
Acquisition strategies are used to get new customers to replace the customers that leave. Acquisition strategies consider “where” you will get your customers from and “how” you will get them. You must also be careful with acquisition strategies because if you forget the customers you have you can upset your current customers. Need evidence?. Just look at the wireless industry and phone plan promotions and how the service providers made better deals for new customers than to look after long term loyal ones they had. It is not the fault of the strategy, it is the fault of the wireless provider. They have essentially nullified customer loyalty. It doesn’t pay to be loyal to these companies anymore.
Examples of Customer Strategies
Retention strategies are the things companies implement to keep existing customers. Loyalty programs are an example of a retention strategy. They provide value for the loyal customer over time such as accumulating points or value. A customer who earns a lot of points builds up an equity that grows in value that if they left it could be lost such as earning travel rewards. As the customer approaches the value of a free trip they don’t want to leave that program.
Growth strategies grow the business that a customer has with the company. In a bank that means getting a Line of Credit or credit card on top of the mortgage and chequing account. Companies have to look at what their customers are buying and not just from your company but about other products they buy from someone else. This type of information could lead to the development of a product line expansions or new market opportunities (ie selling french fries at Pizza Pizza). These things keep a business growing, changing and profitable. Too many businesses keep doing what they have always done. Then it becomes too late catch up to where everyone else is. Just look at Kodak about digital pictures, Sears about online sales (vs catalogs) or Taxis about Uber.
Acquisition strategies look at how to get new customers. Many promotions and contests are designed for acquisition strategies. A few examples are “bring a friend”, two for one, second one half price. These strategies attempt to leverage existing customers to obtain new customers. Trial and couponing are also other examples.
How does a company get to know more about their customers?
This is a good question because learning about your customers takes time, resources and effort. The information has to be good. If it is redundant, ineffective or costs quite a lot to acquire – you might have to re-think your research.
Some companies spend money on research because they don’t know what questions to ask to get the information they need. Asking the right question is very important.
With research, you can learn about customers that you don’t have now, but could have. Find out why they buy from your competition and not you. Maybe your marketing efforts are not effective and they don’t know about you. This might mean you need to increase advertising awareness. Maybe it is your prices or your distribution. These customers could be buying online while you still rely upon brick and mortar. It is very important to know your customer so you can use the right marketing strategy.
Then why don’t small businesses not learn more about their customers?
The answer to this question is evident in the Statistics Canada finding, namely, small businesses account for 98.2 % of employer businesses. Quite often small business lacks the marketing knowledge and discipline and it boils down to the fact that small business don’t know what they don’t know and so they simply don’t do anything about knowing more about their customers.
This is often the reason most small businesses fail. Look at new restaurant openings. I have seen too often that a restaurant spends a lot of money advertising in media such as the local newspaper that cover a large area, They think because if it goes to a lot of people they’ll have a lot of customers. But most customers of a local restaurant tend to be local customers in the neighborhood. A restaurant has to work hard at developing a reputation that can draw from far away into other locals. When they open they should be doing a better job locally and work with drive-by traffic. Doing a better job locally is what they should be doing.
Where does a small business start in getting to know their customers?
The first things a small business should do is start to keep statistics and maybe do some research. Talking to your customers has never been bad for business.
Take note of when (weekday, certain days, weekends) and what time your customers buy (i.e morning, afternoon, evening), how much they buy and what they buy.
If you are a restaurant that information can help you quite a lot. It can help you know when to schedule staff more effectively (staff are working when you have the most customers). It will help your ordering of stock because you will know what you sell the most of and how much you go through. Nothing hurts a business more than a customer that wants to buy and the product they want is on backorder.
Do some research with your customers. Have them fill out surveys. Hire a marketing research company.
If you begin to make some money, then spend some money, especially if you have heavy competition. Hire a marketing consultant to organize market research.
If you need help with what you are doing and what you should be doing. Contact us today and see how we can make big differences with just a little help.
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