Manager leading team meeting with whiteboard on satisfying customer base
Promoting your business

How to grow your customer base

Acquisition, service, growth and retention are four important areas to focus on if you want to grow your customer base for increased profit and long-term growth.

Many businesses only think of acquiring more customers, employing telemarketers and buying leads, when in fact these are only some ways of growing the customer base. 

Before we discuss the strategies, there’s something you need to do first that many business owners fail to do – understand who your ideal customer is. This isn’t based just on dollars spent, geography, demographics and basic info. Success occurs when you tap into the attitudes, values, beliefs and behaviours of your ideal customers.

Your employees are the critical factor to delivering the high level of service your customer wants.

How to identify the ideal customer

Step 1: Look at your existing customers and see what’s common about them in the areas of attitudes, values, beliefs and behaviours. 

The ideal customer characteristics may include nationalities, sex, race, age and education levels. Look for similarities in how they think, act and behave.

Step 2: Determine who is the most profitable. Profitable can come in a number of forms – number of transactions, lifetime value of the customer or the revenue generated. 

Work with your accounts person to find the type best suited to your business. If you’re going to spend time, money and effort acquiring new customers, they might as well be the profitable ones!

Once you have a clear ideal customer profile, you can then consider the following areas to create a customer-based business strategy.

There are two specific strategies to consider with this area:

Know who your ideal customer is

By knowing your ideal customer you can make your marketing efforts focused, deliberate and direct. The key is getting low cost leads. This is not ‘cheap as chips’ leads because sometimes the conversion from those leads takes months.

Sometimes it’s appropriate to spend more for leads, especially if you know how much the lifetime value of the customers is, and also how quickly you can convert the lead into a sale. Better to pay more for a faster converting lead than a cheap slow burn.

Get new customers on board (‘onboarding’)

Churn is a big problem for businesses. If you can get a new customer on board you reduce the risk of losing them by 50 to 80% depending on your business and industry. 

The key here is spending time with your customers post-sale to ensure you understand them and their expectations.

A new customer survey will help you understand them better and build customer retention. It also exposes any flaws in the sales process they went through and, if required, what you can do to recover.

Customer-based service is not about you. It’s about what the customer thinks high-level service is. You need to understand what’s important to the customer – focus your service and delivery on that.

Customer segmentation is important in this area of growth because each customer type will have different expectations of your products and services and staff delivery.

The easiest way to work this out is to survey your existing customers. You can do this in little sound bites as the customer interacts with your company at many of the ‘customer touch points’.

For example, for an IT service business, a quick online tick and flick survey at the end of the initial tech support call, three or four tick the box questions at the end of a hardware installation or on-site service call handed to them by the tech.

As well as three or six-monthly phone calls from your end asking the decision-making customer about how the customer’s business is growing and what they anticipate the business’ needs will be as it grows. The more information you can obtain and understand, the easier it will become to better 'serve' your customers.

The other critical factor around service is that it involves people. Your employees are the critical factor to delivering the high level of service your customer wants. Simply put, a satisfied and happy employee is 10 times more likely to deliver customer service that pops. Creating a satisfied employee doesn’t mean you spoil them like your only child and they in turn hold you hostage.

A satisfied employee thinks and feels they are supported, looked after and valued. How do you create this sentiment? You need to understand your employees and also have the ‘ideal employee’ in mind when recruiting.

You’re not necessarily only looking for skills and experience – similarly to the ideal customer, you’re looking for attitude, values and behavioural traits that suit what your customers are looking for too.

You want to grow with your customers as they buy more, recruit their friends for you, take less of your company’s time, aren’t as sensitive to price, and don’t cost as much to acquire.

Coming back to understanding your customer, what’s important to them and when they are likely to leave or reduce their spending helps you keep them. If you plan and expect your customers to leave, you can create customer loyalty strategies to keep them.

Customer loyalty drivers help with customer ‘stickiness’. Some customers won’t snap up loyalty program as it may not be important or add value to them. However, if one area of the business isn’t delivering the primary need the customer has, the loyalty program you're offering that’s sent them a gift voucher, a discount or an incentive, may be the strategy you need to have them come back for repeated business. 

Loyalty plans need to address the customer’s needs and perceived value. It wouldn’t make sense if BMW offered a $30 reward voucher off the next scheduled service because $30 means little to a customer that spent $200,000 to buy their car.

A reward voucher that was $200 off would be enough incentive for the customer, if they were considering getting a service elsewhere that may be cheaper, to possibly think again and go back to the original dealer. Remember, the loyalty drivers enhance the experience and also help reduce customer defection and reduction of purchase.

Retention is the most under-utilised strategy in growing a customer base, perhaps because it’s perceived by business owners to be harder to do. You’ve worked hard to find the customer, win them over and all you have to do now is keep them.

Keeping them means your business needs to be organised. If you are continually a ‘one-hit wonder’ with your clients you churn through them fast, and everyone, including your employees, get disillusioned as there is no real future for customers coming into your business. There will always be new faces and deep solid relationships between your employees and customers will never develop.

How can you create a future for your customer? Even if you are selling a ‘one off’ product or service, how can you retain the customer? Look at your processes, your employees and their attitude and behaviour, the products and services you currently offer and your policies. You need to stand back from your business with the hat on from the customer’s point of view.

The best example of a business that seems to have one-off customers is a funeral business. Their whole marketing strategy is a retention model. The level of service provided, the consultation with customer’s family, the way employees treat their customers, and even the premises create the ‘total customer experience’.

This type of business can follow up with personal thank you letters after the service, photo tributes and memory services as well as a customer survey a few months after the event.

In conclusion

Before you spend any money or engage external providers to help you, it would be good for you to identify who your ideal customers are and where, in the four areas described, your business needs developing. Customer service and retention are likely to be good places to start as you already have the customers and you want them to keep buying and recruit their friends.

Written with contributions from Jen Harwood, Business Person of the Year 2015, and motivational speaker, author, and business coach. 

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