What is more important: new or repeat business and how can a business attract more of either? What are good, effective ways to keep customers coming back?
Marc Barber, editor smallbusiness.co.uk
The low boredom threshold of entrepreneurs means they are often like a cat on a hot tin roof, hopping from one project to the next.
Launching a money-spinning idea or chasing new sales is all well and good, but mining your existing customer base and getting repeat business should always be a priority. Go for the low-hanging fruit – it's less expensive and time consuming than trying to establish fresh sales leads.
Consider the following:
When a purchase is made, try to up-sell by offering sensible discounts for multiple purchases
Put forward special offers and incentives
Consider a discount or loyalty bonus for long-term customers (without damaging your bottom line too much)
Keep an eye on what the competition is doing so you're never left behind.
While not appropriate for every business, try to bring in some kind of contractual agreement. The recurring revenue will strengthen your business no end.
For new sales, you need to do effective marketing:
Break down your customer base and focus accordingly
Establish your unique selling point
Offer a guarantee
Arrange references and testimonials for your company
Send out emails and newsletters
Train your sales team (don't underestimate the damage that can be done to your brand by salespeople who don't understand your products and/or services)
A guarantee on what you provide can also set you apart from the competition by demonstrating real confidence in what you do.
Offering incentives and launching marketing campaigns are all well and good. But, the rule is to get in contact with people and find out what they want directly – never second guess your market.
John Wright, chairman of the Federation of Small Businesses
Repeat customers are the bread and butter of your business, but new customers are the cornerstone to its success. You should have a thorough and detailed business plan and included in that should be a customer profile. You will need to know who you appeal to and how to target them, revisiting this when times get tough to keep your business at the forefront of their mind.
Regular consumers are less expensive to recruit to your business, but without new customers, your business cannot grow. If a consumer comes back to your groceries, restaurant or hairdressers, the probability is that they will like what they see and spread the word – providing you with free advertising.
But you cannot rely on word of mouth alone. Paying for advertising is an effective way to bring in new customers. However, you need to be targeting people in the right way otherwise you may watch money float away. Set realistic expenditure and media targets. Planning in advance and identifying your customer profile will make this process simple and effective.
Keep a record of all your customers – even those who have simply made enquiries about your business. Email a weekly newsletter keeping customers in the know about new products and offers.
Loyal customers are a bonus for any business but you must always give them a reason to stay loyal. Simple extras, such a free gift with a new product or a showcase evening with free wine, are a great way to keep your regulars interested and intrigue new customers.
Repeat customers return because their experience is consistently positive. Your employees are on the front line – their interaction with clients can cement relationships that bring regulars back to your business. Invest in thorough training so that your employees deliver the highest standard of service enticing new, and bringing back, those all important customers.
Tony Buddin Business Link adviser, Business Link
Investment in marketing to generate repeat orders from existing customers tends to be many times more cost-effective than that targeted at winning new business. Nevertheless, finding new customers is also essential, to offset natural churn and to sustain growth.
The key to business success is to delight customers by exceeding their expectations. This will not only ensure repeat business but also help introduce new customers to you through recommendation. The product or service supplied must represent value -for -money, but to delight, that special bit of extra service needs to be provided. Examples are, the bunch of flowers left for new home owners by the estate agent, the restaurant manager who thanks diners with a complimentary drink and the owner of the building company who calls clients regularly to check progress on their building project.
To retain and find new customers, a good website is now a key tool. Profit from your website by providing added value customer services such as:
Encouraging feedback from customers
Offering a facility to purchase online
Enabling customers to track the progress of orders
A regular 'opt-in' e-newsletter and tailoring information to customer needs not only increases loyalty, but is also a cost efficient way to obtain repeat orders and to promote new offers.
The Business Link website provides a wealth of good tips on all aspects of marketing, available at businesslink.gov.uk/marketing After reviewing these guides, take advantage of the free and impartial advice available through a local Business Link Adviser, by calling 0845 600 9 006.
