5 Ways Small Business Can Use Customer Marketing to Grow

Small businesses don’t have big budgets. Small business needs to look for low-cost opportunities to compete and grow. Given this fact of life, customer marketing is often your best and most efficient path to growth.

“But I’ve always focused my marketing on customer acquisition.”

This is probably true and it’s probably true for your competition as well but businesses with strong customer relationships are usually leaders and when the relationships are with heavy category users they are also profit leaders. So, while your competition is focused on acquiring new customers of undetermined value, you can put focus your resources on customer marketing, on protecting and developing your best customers.

“OK, you’ve convinced me but how do I do it? How do I use customer marketing to grow my small business?”

Five Customer Marketing Priorities that Drive Profitable Growth

1. Focus on Best Customers. For most small businesses the minority of their customers represent the majority of their sales and profit. These best customers are typically also heavy category users and generate most of the activity, sales and profit, in the category. Find them, understand who they are and what they need. It’s not what most of your customers need.
2. It’s a commercial relationship. Personal relationships, what they are like and how they function, are often used to drive decisions when designing a relationship marketing strategy. But lets get some perspective. There are significant differences between the relationships we have with friends and family, and commercial relationships. For example, in a commercial relationship an exchange of tangible value is expected.The goal isn’t to become friends with your customers. If they feel some affinity toward the business, if they find value beyond functional benefits from using your products or services, you’ve succeeded and, all things being equal, they will choose your business over the competition.
3. Relationships don’t just happen. Relationships are built over time, they are achieved when value beyond functional benefits is delivered consistently. This is what makes a brand; value delivered consistently over time. Otherwise you have products with names masquerading as brands. Creating this relationship is your most powerful and may be your only competitive insulation.
4. Relationships are dynamic. They go through phases. They ebb and flow. And, just like personal relationships, each stage has a unique degree of intensity. Commercial relationships also go through phases that require appropriate emphasis on contact frequency and content.The following labels identify each phase and describe the the consumers’ goals: Prospecting, Consideration, Purchase, Connection and Loyalty.Note, the purchase happens in the middle, between Prospecting and Connection, not at the end. Connection is the most important stage in terms of ROI and probably the least understood and exploited.
5. Maintain the relationship. Once the relationship is established maintaining it is vital. It isn’t hard but it does require active involvement. Good customers, and they know who they are, expect to be rewarded. And it’s rewarded, not bribed. Relationship marketing doesn’t preclude sales messages. In fact, because it’s a commercial relationship, targeted, relevant sales offers add value and can contribute to building relationship equity, but they have to be targeted and relevant, or it’s just noise.

Hip Shots

• Build your business by focusing on your best customers.
• Recognize that it’s a commercial relationship where value is exchanged for value, and deliver value beyond what’s expected.
• Understand that relationship marketing is a business strategy and takes time.
• Communicate with your customers in a manner that’s appropriate for where they are in the purchase cycle.
• Reward your best customers and they will reward you.

Tagged as: Best Customers, Business Strategy, Customer Marketing, Customer Relationship Marketing, Customers, Marketing Strategy