Looking after customers is important for any business, and using your marketing strategy to attract new customers is important. But in truth, your existing customers are more valuable to your business than your new ones. This is because an existing customer already knows and trusts your brand and is highly likely to buy from you again. It is also a lot more cost-effective to retain an existing customer than to acquire a new one.
In this blog, we look at why customer-focused strategies work, and which customers you should target.
Why is a customer-focused strategy important?
By using a customer-focused strategy, you can ensure that customers continue to buy from you, and also recommend your product or service to others. Some business owners fall into the trap of creating a business-focused strategy, where the bottom line is more important than the customer experience. However, by getting your customer strategy right, your business will not only grow but grow in a sustainable way.
Which customers should I target?
In order to maximise the return from existing customers, you need to find the customers that count.
All customers are not equal. Some of them are a lot more valuable than others and they are the ones whom you should be targeting. For most businesses, 80% of the profit comes from 20% of the customers.
A good Customer Relationship Management (CRM) system will help you identify this all-important 20%, by showing you what stage your customers are at in the customer lifecycle. Your most profitable customers are your core customers and their requirements and expectations should drive your strategy.
What is a core customer?
All customers start as prospects – people who are aware of your products but who haven’t yet made up their minds to buy. Those that actually make a purchase become first-time buyers and if they come back again, they become early-repeat buyers. Once they are buying from you regularly and spending the most overall (not per item) they have become your core customers. Your core customers are the ones who show they trust you and know that you will provide them with products or services that they want.
How can I nurture customer loyalty?
It is important to nurture core customers to retain their loyalty. Many business owners generate a degree of loyalty through marketing campaigns and loyalty programmes. However, this drives only behavioural loyalty, and the customer may well still defect to a competitor with a more attractive price.
Better than behavioural loyalty is attitudinal loyalty: an emotional bond based on respect and trust. You know you have achieved this when your customer shouts about how good you are and becomes a regular source of important referrals.
Attitudinal loyalty is achieved by building relationships with your customers, really embedding them in your brand culture. The way you approach this depends on your business, but however you do it, you’ll see that the right motivation yields the best results.
By understanding which customers to focus on, and by prioritising attitudinal loyalty, you can create a business strategy that will be both effective in the short-term and sustainable in the long-term.
If you are not sure where to start with planning a customer focused strategy, don’t worry – Get Ahead VA can help. We have a team of professionals who can work with you on your strategy, focusing on what you want to achieve and how you are going to achieve it. Contact us today on 01483 332 220 to find out more.