We speak with a lot of small business owners about Bizyhood, and their first question is typically “How many eyeballs are on your site?” Their interest is to gauge how big an audience they will attract if they advertise with us. The thing is, we never talk about advertising in our initial discussions.
Why don’t we talk about advertising? Because Bizyhood isn’t an Advertising platform, it’s an Engagement platform. Did you know that it can cost up to 10 times more to capture a new customer than to re-engage with an existing customer? Also, existing loyal customers tend to spend more on an average basis than a first-time customer. As a small business owner, do you know what percentage of your first time customers come back?
This post from Inc. lists 10 ways to get more sales from existing customers, and it’s a recommended read. We will focus on five of her tips here that apply specifically to small business owners:
(1) Stay in Touch – this is the most commonly overlooked tactic in building a solid and loyal customer base. Simply saying “thank you”, or asking for feedback (our personal favorite) can go a long way. Your customers have a lot of things clamoring for their attention on a regular basis. It’s very easy for them to overlook or forget that you are an important part of their routine – a subtle reminder is never a bad thing. Just don’t overdo it. The other big key is don’t always reach out looking to sell something. Offer suggestions and advice – if you give something of value, you will tend to get something back in return.
(2) Practice the art of the perfectly-timed pitch – This is more than just sending out an email right before the big game or holiday. This is being in the right place at the right time? It’s hard to know exactly when that is, but I can guarantee one thing – if you aren’t doing any outreach at all, you’ll never hit them at the right time! It’s been described as the “McDonald’s strategy” – you may see a Big Mac ad in the morning paper, hear an ad on the radio on the way to work, and see a billboard on the drive home. Those are all subtle messages, so when you start getting hungry, you pull into a McDonalds and get your Happy Meal. Small business owners won’t have the budget to spend as much as McDonalds, but you don’t need to. Being in touch regularly with helpful info (See #2) will help with this tactic greatly.
(3) Remind customers of everything you offer – Combine this with #1 and #2 to kill two birds with one stone. Are you trying to ramp up a specific part of your business or want to get feedback on a new product or service? Send a note out to your existing customers announcing it and see how they feel about it before offering it to the general public.
(4) Create incentives for in-house referrals – This can go hand-in-hand with a loyalty program. Loyalty points and referral programs can now be automated and brought online, which increases the reach of your word-of-mouth efforts. There are so many business owners that claim that word-of-mouth is their #1 growth driver but yet do nothing to enable it online. This is the easiest, simplest and most effective thing you should do!
(5) Think Lifetime value, not transactional value – a customer typically doesn’t become profitable on the very first transaction. And if you try to make them as profitable on the first transaction as your “regular” customers you are more likely to lose them. It takes time to build up a strong relationship and earn the trust that turns a customer into a regular customer. This is more than just offering a promotion – it’s getting to know the customer and making that decision if they are worth the long term investment. If they are, do the things that will keep them loyal for a lifetime. It may be different things for different customers, this is where flexibility and creativity are key.
Advertising is important, but Engagement is necessary.
The best businesses build their foundation up from their current customer base, starting with their first customer. So, keep spending your Ad budget in smart places, but also be sure to carve out a piece of that budget to engage and communicate with your existing customers.