Dallas Business Consultant Elijah ClarkDallas Business Consultant Elijah Clark

Building Value and Retention

here are plenty of products and services on the market from which your customers could choose to make their purchases. Customers that select your business to purchase goods or services do so because of their overall perceived value of your business. Consequently, your business must produce value that connects to, and positively influences, the customer’s perception. If the customer has a positive perception of your business, they are more likely to make a purchase and promote your services or product, which can translate into future sales.

Like most businesses, I assume that the goal of your marketing strategy is to generate profit and brand awareness; which means it has to identify the right type of customer. From a marketing perspective, there is no better customer than a repeat customer. Considering the cost of maintaining repeat customers is less than gaining new customers, the additional revenue could be used for increasing your business’s competitive advantage. Consequently, building customer satisfaction and loyalty are paramount for retaining customers and increasing revenue.

Meeting and Exceeding Customer Expectations

Most 5-star hotels maintain customer databases detailing the room order choices of their guests. If a guest has asked for a particular beverage to be kept in the mini bar, the next time that guest makes a reservation at the hotel the staff ensures that the beverage is stocked in the room. Such small gestures go a long way in making customers feel important.

It is necessary to interact and communicate with customers on a regular basis if you wish to increase the satisfaction of your customers. In these interactions, it is required to determine the customer’s needs and then act to satisfy those needs accordingly. Even if you offer identical products within a competing market, satisfaction provides high customer retention rates. It’s no secret that retailers offer frequent shopper rewards to increase customer satisfaction. Retailers do this for a reason— because it’s a no brainer if you want customers to come back. Many high-end retailers also provide membership cards and discount benefits so that the customer remains loyal to their business.

Customer Perception

Customer perception is a significant predictor of customer purchasing outcomes. The customer’s perception of your purchasing processes can influence your business’s reputation and sales. Customers with a positive perception of your business will likely react differently to reviews posted by previous customers compared to customers that do not have a positive perception.

Value Perception. As a business, you should seek to position positive product knowledge at the beginning of your customers’ journey. While attempting to examine the relationship between customer uncertainty reduction and value perception, I found that customer uncertainty about a business influenced the overall value perception of the selected businesses. To reduce the concern of potential customer uncertainty, your business should publicly display reviews and testimonials to assist in improving the value perception of your business.

Customer Profiling

Customer profiling is a behavioral relationship marketing technique which involves a variety of marketing strategies ranging from simplistic to complex. Customer profiling begins with the identification of data associated with satisfied existing customers and then uses that data as a basis to target new prospects with similar profiles. The profiles of customers can be categorized in multiple ways according to influential variables present in their profile.

Profiling consists of determining the characteristics and demographics of customers. Identifying demographic profiles of current customers may help your business strategize ways to attract new customers and generate higher revenue through targeted marketing strategies. To gather demographic information from existing customers, your business should track sales data and other customer related information to help determine the ideal customer for your business.

Customers have unique preferences and needs and segmenting allows for managing customers based on their individual or grouped characteristics. Invalid segmenting could produce dissatisfied customers. Customer profiling should be the basis of your segmenting strategy and has proved to be the most useful strategy in customer acquisition.

Cultural Uniformity. Although it is rarely discussed in smaller businesses, analyzing the cultural differences between your customers can help in developing targeted marketing strategies. Cultural differences naturally exist and can greatly influence your marketing. Cultural differences may include customer locations, beliefs and cultural norms, lifestyle, income, and many other psychographic and demographic parameters. Additionally, it is important to consider online customers and the environment and culture of your website visitors as they often have a wider reach than brick-and-mortar locations. No matter the location, you may have to acknowledge cultural differences if you decide to change the way you do business, or if you plan to expand online, or to another region.

The targeted customer for your business was likely determined by who your business would like to attract. You should target your marketing efforts toward those individuals and businesses who would most likely utilize your products or services. If you want all customers and ethnicities to purchase services from your company, you may need to analyze your marketing strategy and determine how to make it attractive for all groups and cultures. The best method to understanding your customers is to conduct marketing research, which is discussed later within this book.

Types of Customers

Customers play a significant role in the success or failure of your business. In fact, the customer is the actual boss in all dealings and responsible for profits generated for your business. The customer is the one who uses the products and services and judges the quality of those products and services. Hence, it’s important for your business to prioritize and retain former customers as well as continually gain new customers to sustain and grow the business. A strategy to gain new customers includes segmenting your current customers into groups which will help determine how to satisfy and attract your desired customer group.

Your segmenting strategy should also take into account:

  • Age group of the customers
  • Geographical location
  • Lifestyle of customers
  • Social status of customers

Targeting the Right Customers

All customers fall within select groups, and it is your responsibility to know which group that is. It is also essential to know if you are reaching your desired targeted group(s). For example, funky designs and loud colors would be a hit among teenagers, whereas middle aged and the elderly would prefer subtle colors and sophisticated designs. Suits and khakis are extremely popular amongst men, whereas females prefer blazers and blouses. Know your target groups and plan accordingly.

Customers are often of the following types:

Loyal Customers. These customers may be less in number but promote higher sales and profit as compared to other customers. These customers are generally satisfied with your product or service and desire consistency and reliability. Loyal customers often require individual attention and rewards that demand quality customer service.

Discount Customers. Discount customers are also frequent visitors but they usually only make purchases when offered discounts on regular products and brands or buy only low-cost products. The greater the discount, the more likely this customer is to purchase.

Impulsive Customers. These customers are difficult to market to as they don’t have any specific item on their purchase list. Handling these customers is a challenge as they don’t look for particular products and are attracted to businesses that have many options to choose from with products and prices on display.

Wandering Customers. These customers are likely to generate the least profit as they are not sure of what they want to purchase or if they want to purchase. Additionally, these customers don’t usually have the finances available to make a purchase but may purchase at a later date dependent on whether they are still interested and have not found a better value elsewhere.

As you can see in the explanations above, loyal and repeat customers are ideal for most businesses. Nonetheless, it is necessary for you to study the behaviors of customers in your chosen demographic before connecting with them as it will help you to identify specific customer needs and respond accordingly. By identifying the behaviors of customers, you can easily create targeted strategies to attract and satisfy their wants and needs.

Relationship Benefits

Building relationships with your customers is a must when looking to start and grow your business. Some of the substantial benefits of building a quality relationship with customers are explained below.

Customer Satisfaction: Customer satisfaction is an important measurement of how a product or service meets or surpasses the customer’s needs. It is a reliable indication of the potential for repeat business and brand loyalty. Customer satisfaction can be attained only if your customer has an overall good relationship with your business and you consistently meet or exceed their expectations. In today’s competitive marketplace, customer satisfaction is an important performance factor and a basic differentiator of business strategies. Hence, the more satisfied the customer, the stronger the bond they have with your business.

Customer Retention: Customer retention is a strategic process to keep or retain your existing customers and deter them from using other suppliers or organizations. This is only possible when there is a quality relationship between your business and the customer. Usually, a customer will remain loyal to a particular brand or product as their needs grow and only if those needs are properly fulfilled.

Referrals: The most cost effective approach to grow your customer base is through referrals. When customers feel satisfied, they are encouraged to become brand advocates for your business. These referrals are beneficial for your business considering there is little to no cost associated with this process. Referrals are an optimal form of marketing and profit generation.

Revenue Growth: When your business maintains a healthy relationship with customers, revenue will always increase considering current happy customers tend to purchase more. There is also the potential for a satisfied customer to purchase additional products or services when offered the option to bundle those products and services. For instance, if a satisfied loyal customer has home insurance from an insurance company that they trust, there is a high probability that the customer will also purchase property and auto insurance from that same company.

Retention Cost: The cost to service existing satisfied customers is substantially less expensive than that of acquiring new customers considering there is no acquisition cost, your business should already know the needs and wants of existing customers, and active customers will have fewer queries and complaints as they are already aware of your business’s processes, products, and checkout flow.

Customer Behavior

Customer behavior refers to the study of the purchasing tendencies of customers. Understanding the buying behaviors of customers will help you better market and sell your products or services to your targeted customers. It’s important that you understand what prompts your customers to purchase a particular product as well as what keeps them from making a purchase. Understanding the behaviors of your customers will additionally assist in comprehending the decision-making stages your customers go through before making a purchase. Generally, there are several stages your customer goes through before they finally make a purchase. Other factors, be they cultural, social, personal, or psychological, also influence the buying decision.

To help understand customer behaviors in an online environment, a study consisting of 350 customers concluded that customers’ attitudes and behaviors toward businesses depended on their perceptions of the business, the product, ease of use, and convenience.[1] Establishing an understanding of the behaviors of your customers is central to developing successful marketing strategies. Analyzing customer behavior is vital for exploring opportunities that help in the development of successful strategies that influence customer decisions and expand brand awareness. Moreover, attempting to offer a product without understanding customer behavior could cause a loss of both revenue and time.

Social Behaviors. Understanding customers’ social behaviors are valuable for gaining insights into human motivations and how customers allocate resources in various circumstances when making purchasing decisions. Your business could benefit from learning about the social behaviors of your customers as a means to direct marketing correspondence and impact customer behavioral attitudes.

Personal Values. In the context of business marketing, personal values are defined as an underlying determinant of the attitudes and behaviors of customers. In addition to social behaviors, personal values were found to have a significant influence on customer behaviors. However, personal values were noted to have a more significant effect on customer behavior compared to other psychographics considering personal values link centrally to an individual’s cognitive system.

 

[1] Lim, W. M. (2013). Toward a theory of online buyer behavior using structural equation modeling. Modern Applied Science, 7, 34. doi:10.5539/mas.v7n10p34

Website Traffic, Is It Alien Or Human?

There are two ways to gain customers for your website or business. The first way is to pay for it. You could easily pay a marketer, advertiser, or branding company and gain customers that way. The other way is to earn your customers. This is the way that I believe works best and the one that I practice. To earn customers, you must get to know them. You should know where they go, which websites they visit, and local events they attend. This doesn’t just consist of putting your name and business card in these locations, but it involves you interacting with them and finding a true understanding of their lifestyle and preferences, and what it is that they desire from a business such as yours.

Alien Traffic. A study by Incapsula, one of the leading web security services and optimizers, unearthed that more than half of your website traffic could be alien. Not exactly the ones portrayed in War of the Worlds, but maybe. The findings released suggested that around 31% of website traffic was harmful and includes spammers, spies, scrappers, and hackers.[1]

Then there are the 20% of friendly visitors such as Google Bot as well as other search engine indexers. What this means is that analytics do not provide the whole picture and human visitors are not alone prowling the internet. To mitigate this, you should make security a part of your online marketing undertaking and tighten your website content with relevant keywords for the friendly indexers so your website is pulled by more human traffic based on the intent of website visitors.

 

[1] http://www.bizepic.com/2014/12/19/shocking-half-website-traffic-2014-bot-traffic/

Relationship Marketing

Strong customer relationships are essential for your business if you desire to increase sales and generate a positive brand reputation. Customers frequently recognize their relationships with businesses similar to personal connections. In analyzing whether customers looking for relationships with businesses actually desired a genuine personal relationship with the business, it was found that a majority of business-to-customer (B2C) relationships were inauthentic when contrasted with genuine person-to-person relationships.[1]

The foundation of relationship marketing includes four essential elements of relationships that include commitment, trust, comprehension, and quality. In an examination of 306 online surveys, researchers confirmed that each of the four elements of relationships influenced customer loyalty. Nevertheless, the customer’s perception and comprehension of quality and value influenced the relationship and purchase intentions. [2]

As a business, you need to identify your target customers by analyzing their lifestyles, psychographics, income, spending capabilities, and mentalities so that you may offer them relevant products and services. For example, knowing that individuals from lower income groups would never be interested in, or have the means to buy, expensive and luxurious products is beneficial in that it allows your business to focus its attention on the likely buyers of your product or service. Trying to sell a Mercedes or a luxury watch to someone who finds it difficult to make ends meet would definitely be a disastrous marketing technique.

 

[1] Bettencourt, L. A., Blocker, C. P., Houston, M. B., & Flint, D. J. (2015). Rethinking customer relationships. Business Horizons, 58, 99-108. doi:10.1016/j.bushor.2014.09.003

[2] Jussila, J. J., Kärkkäinen, H., & Aramo-Immonen, H. (2014). Social media utilization in business-to-business relationships of technology industry firms. Computers in Human Behavior, 30, 606-613. doi:10.1016/j.chb.2013.07.047

Loyalty and Relationships

As humans, we are greatly influenced by our relationships. We enjoy being members of loyalty programs and networking groups that align with our goals. We patronize certain supermarkets, gas stations, and banks, and make most of our purchases from select companies. This showing of consumer loyalty is due to an unspoken relationship that exists between us and the businesses and brands we support. They make us happy, we trust them, and their consistency is calming in a chaotic world with an overwhelming amount of choices.

Relationships are natural, and our preference for who we develop relationships with are often based on past experiences and expectations. Similar to dating, customer relationships involve courting and evolution into permanency or a breakup. At some point in every relationship, there is the question of whether the relationship has a future. At that moment of questioning, the relationship either continues down a happy road, or it ends.

The Courting. In relationships, everything starts perfectly. You show the prospect your best self as the ideal candidate for a long and fruitful relationship. The seduction begins. Promises are made, benefits explained, enticements for loyalty are offered, and declarations are made as to how you and they can create magic together. They find you to be a worthy partner and the two of you begin on a wonderful journey.

The Breakup. As the months go by, they start to feel unhappy that you aren’t paying much attention to them. You forgot their birthday and the last time you were together you were caught flirting with another prospect. They stop answering your calls and the last time they visited something just felt different. Eventually, they start complaining about small things and indirectly question what you are doing with their money. You see it in their behavior that the relationship is coming to an end.

The reality is that the relationship was over a long time before it ended because of those small things that you did or didn’t do which got you to this point. It could have been something as simple as not responding fast enough to their email or text, not paying attention to their needs and wants, or that you’ve failed to notice and respond to how they’ve changed as a person. Either way, they are no longer attracted to you, and they no longer believe in your optimism about the future.

To sustain a relationship with a customer, you’ve got to think like a customer. With every visit, call, or each time you send an invoice to your customer, consciously or unconsciously, your customers are asking themselves questions such as; why did I hire these guys or purchase this product? Do I still need them? Is this worth what I’m paying? Am I making progress? Am I seeing the results they promised? Is this the best company to purchase from? Remember, it’s usually many little things that add up to their decision to terminate the relationship. If you are aware and address those issues from the start, and keep focused on satisfying the customer throughout the relationship, you’re in a much better position to sustain the relationship.

Common Interest

In a relationship, it’s important that you have common interests. It’s hard to keep a relationship moving forward if you have nothing or little in common. Factors that customers consider when entering a relationship with your business include the business’s reputation, niche, work ethics, communication, customer service, and if your business has the resources to meet their needs.

Customers select you for a reason. In the initial meeting with your customers, you should try to determine that reason by simply asking, “What is it that you want from me or my business in this relationship?” or “Why did you decide to meet with me today?” Additionally, ask yourself what you want from your customers and always outline that during the meeting. Don’t just focus on the product or service benefits that you offer, but also outline your unique processes in achieving results.

Terms of Agreement. Once you decide on how the relationship should move forward, write it down and make it clear. Just because you understand your terms, does not mean that your customer has a clear understanding. If you are selling a product on a website or through a physical location, you should have important terms mentioned multiple times during the course of business, in contracts, and on your website. Furthermore, educate your customers to prevent confusion about the terms. If you can create a solid and mutually rewarding foundation with your customer, the rest of the relationship will be smooth.

Effective Communication. Many customers will discontinue business with you simply because they are confused about something or misunderstand your contract. Effective communication is key to a healthy relationship. As a representative of your business, you should be involved in, and dedicated to, the satisfaction and growth of customer relationships within your business. When working with customers, know why the customer selected you in the first place. Keep sight of customer goals and pursue those goals relentlessly to satisfy your customer. Chances are your customers have a good reason for wanting to work with your business or purchase your product or service. Ask what that is and why, today of all days, they chose to make the move.

Most customers already believe they know what they want, very often they do not want your opinion, and want only for you to provide them with the product or service requested. While this is often ok, you should still try and understand what they are trying to achieve, or you may end up with poor reviews and an upset customer who feels they wasted their time. It all comes down to staying focused on the goals of the customer and the strategies for achieving those goals. Two primary questions to consider asking customers when attempting to understand their goals include:

  • What is your goal for using or purchasing this product or service?
  • What results are you expecting by using this product or service?

Asking these questions will help demonstrate a genuine concern for your customers and they will, most often, appreciate your sincerity.

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