Building Loyalty Without Selling Your Soul
Spending too much time going after new customers can make your relationships with current customers grow cold.
Building a loyal customer base is vital to the sales and profitability of any franchise system. In fact, acquiring new customers is six to seven times more expensive than keeping existing ones. Spending too much time going after new customers can make your relationships with current customers grow cold.
So how can you retain customers who will come back frequently, spend more and refer others? Unfortunately, the economic downturn has created a type of consumer that is looking for specials, bargains, discounts and daily deals. In this climate, it becomes harder for businesses to build loyalty to their brand.
You may be tempted to offer heavy discounts to lure customers. But the reality is most dollars-off and percent-off customers are just good for a one-time sale. Couponing and discounts can cheapen a brand.
And, with social media changing the way that customers relate to businesses, heavy discounts can tarnish your reputation in an instant. Daily deals, for example, may be a great way to get customers through the door, but the online incentives can spawn prominent bad reviews from customers who are hungry for coupons and hard to please.
Identify the Ideal Customer
To build a long-term customer relationship, you must first identify the ideal customer for your small business. Targeting these leads and retaining the customer should be part of your company’s marketing plan.
Our service generates highly targeted leads with its monthly welcome packages sent to people who have recently moved. The program invites these new guests to try businesses, organizations and services in their new local community. The service creates a positive connection with new movers by helping them get acclimated to their new surroundings and helps businesses gain new loyal patrons.
Research shows that new movers make ideal customers and their numbers are substantial. More than 42 million Americans move every year. New movers are nobody’s customer. They are eager to get to know their new neighborhoods and five times more likely to establish loyal relationships with local businesses than a settled household.
They also forge more than 70 new business relationships within the first six months of living in a new community. And new movers are apt to change brands 40 percent of the time, compared to non-movers.
One of the biggest names in franchising, Papa Johns, identified new movers as new customers they want to reach and keep. They offer a free pizza, no strings attached, through Welcomemat. New movers respond well because they can barely get utensils out of the boxes or pans on the stove.
Our business tracks the new mover via patented barcode software. Barcode labels are preprinted on invitations in the welcome package. So when a new mover visits his local restaurant with a complimentary dinner offer, insights into the customer and the moving population in the specific area are captured.
Fulfill Customers Wants and Needs
Getting new customers in the door is the first step. Fulfilling their wants and needs is the next. Gain insight into what they value by asking them to fill out a form with their contact information, product preferences and date of birth. It is important that once customers entrust you with their personal information, you do not abuse it in any way.
By strategically building a database of customers, you have the information to create a program that rewards loyal customers. Whether you use a mobile-based loyalty program, or a paper punch card, rewarding loyalty can be a great long-term strategy for any business or organization.
Show appreciation for the new customer. Tuck a thank you note into a bag. Welcomemat, for example, sends an automated thank you note generated on the business’s behalf after a new mover visits the first time.
The gift, gratitude and knowledge of your customer takes the relationship to a new level. You are building loyalty and enhancing value.
Here some additional loyalty-building strategies.
Keep in touch. Create an ongoing relationship through high-return marketing techniques such as emails, e-newsletters, direct mail and social media.
Use the demographic and sociographic data to add retail and menu items and décor that bolsters revenue and appeal to your client base.
Keep it local. These days, people are growing increasingly wary of big box stores. Especially in tight knit neighborhoods, more and more people are seeking out their local businesses. Show your support for your fellow small-business owners by instituting a reciprocal program with another local business that involves using each other’s products or services. Make sure you publicize this program via your advertising, signage or marketing materials.
Create a broader connection. Your local customers may become irritated if the only time you contact them is to push your products or services. From time to time, reach out to them with something that does not directly benefit your business. For example, send them an article on a topic that interests them or a letter that provides helpful information about the community. While the article or letter may have nothing to do with your business directly, it will create a broader connection that can instill loyalty in customers.
Recognize your customers. Present the customers that have been with you for months or years with rewards like a small thank you gift, access to an exclusive event or a special offer. These rewards do not have to cost you a dime, and customers will remember that you went the extra mile.
Establish an active presence in your community. New movers are in need of many services, products and a support system. Engaging regularly in local groups, such as associations and charities, allows you to network with new customers and get to know them on a more personal level – an inviting approach that often cultivates long-term customers.
Placing a high priority on customer loyalty through communication pays off, not only by keeping the customers you have, but in the referrals they give you.
Brian Mattingly is the founder and CEO of Welcomemat Services, a marketing strategy and technology company that connects new movers in a community with local businesses and organizations. Find him at fransocial.franchise.org via the directory.