As Valentine’s Day approaches, many Australians celebrate in various ways to show their loved ones that they care. From simple gestures to lavish gifts, efforts are made to show that we understand, appreciate and value our loved ones.
What if, as business owners, we made the effort to make our customers feel understood, valued and appreciated? What could this do for our businesses? Well, the answer is a lot!
All too often, businesses focus on obtaining new customers. It’s the obvious way to increase profit margins, right? Wrong. Focusing too much on customer acquisition, at the expense of keeping your existing
customers happy, is a common mistake and it could be costing your business.
Think about some of the most successful brands like Virgin, Apple, Nike, Uber and Louis Vuitton. For
lovers of these brands, what they evoke is an emotional response not a rational one. Loyal customers “love” these brands. The same can be true for small businesses. As a business owner, how do you make your customers feel understood, valued and appreciated? How do you get them to “fall In love” with your business? Ultimately, how do you achieve customer loyalty?
Customer loyalty isn’t just about a fancy membership card and a loyalty discount. Loyalty is also about knowing your customer and reminding them that they are important to you.
What are the three pillars to achieve and measure a loyal customer base?
Customer value
Customer value is perceived differently in every industry and it’s important to be able to report on
these metrics in a way that is relevant to your business. What constitutes “best” should be determined by your business and not by your software provider. Customer value can be represented by the profit margin you get from the customer, the amount of money they spend or the number of times they shop with your business.
Customer loyalty programs
Loyalty programs are vital to most customer-centric businesses, but choosing the right type of scheme for your customer base will ensure long-term success. For example, a percentage off scheme may not suit businesses with high ticket items, but loyalty points and complimentary gift voucher schemes may provide an incentive for customers to return and redeem rewards. Retailers may also choose a combination of schemes, discount structures and benefits.
Whatever you choose for your business, your ERP system should both support and automate your
loyalty program. Making customers wait while you calculate discount rates or issue vouchers and redeem points will inconvenience the customer and have a negative impact on the customer experience.
Communication
Reminding your customers you’re here can be as simple as sending an email, but targeted marketing
will always get a better response. Using customer interest groups to drive direct marketing where it
counts is an ideal way of managing customer communication needs. Segmenting your database and tailoring your marketing message to your customers is vital.
Knowing your customer’s communication preferences will also improve the success of your
communication. Whether it’s email, SMS or printed media, ensure your ERP or CRM system can accommodate a variety of customer preferences.
What next?
With customer loyalty comes brand awareness, word of mouth and growth. Loyal customers advocate for your business and tend to acquire new customers on your behalf.
Simply by focussing on your current customers you will find new ones.
Meeting your customers’ needs and expectations will keep you from pushing down your bottom line to generate new business and allow you to reach for the best attainable margins with your loyal customers.
Joanne Hendriksen, Implementation & Support Manager, Foresiight
