The customer lies at the heart of any marketing strategy. You need to attract them, get them to buy, gain their loyalty and respond to their grievances.
You have a good product. You have defined clear sales targets. You know where you want to sell, at what price and to whom. You have developed an online and real-world promotional campaign. But a key ingredient is missing from this perfect marketing strategy – the customer.
Acquire new buyers
The first step is to gain customers. You have to get in touch with your target audience, multiplying all the opportunities to build a relationship with them and, ideally, turn them into customers.
- Conferences, professional association meetings, trade shows and networking events are all opportunities to meet potential customers when you operate in the business-to-business segment.
- For companies directing their sales at the general public, festivals, community events, sports events or even the street present opportunities to come into contact with a large number of people very quickly.
- On the Internet, social networks represent a good vector for contacting potential customers.
- It is also sometimes worthwhile contacting people by phone. It is much easier to ignore an e-mail than to hang up on someone at the end of the line.
Putting together a directory, including as much data as possible about these potential customers, is a crucial step. It should also be updated on a regular basis.
Conversion rate
The conversion rate refers to the ratio between the number of customers stepping over the threshold (actual or virtual) of your store and those who end up completing a purchase is called the conversion rate. This varies enormously depending on the type of business and the distribution channel:
- Store. In a physical store, the conversion rate usually reaches between 20% and 40%. The rate is particularly high at supermarkets and other stores providing essentials, along with electronics retailers. It is lower in luxury stores and art galleries.
- Internet. Online, the conversion rate is between 1% and 3%. Some portals, like Amazon, can achieve an average rate of about 10%.
- Showrooms. The phenomenon of "showrooming" or "webrooming", which appeared in the 2010s, involves consumers going to physical stores to track and compare products before buying them online, often at a better price.
Generally, brands offering products that customers need urgently or that they cannot find elsewhere have a higher conversion rate.
Ensure quality service
Companies that know how to nurture their customers have more success than those who just sell them a good product. Customer service includes a whole range of measures – often intangible – which improve customer satisfaction and make customers want to come back.
- A pleasant environment: Do customers have access to customer parking? Do they get a coffee when they come in? Is the waiting room or reception area clean and well-lit? Have you thought about an activity to occupy their children or other people with them? Companies who pay attention to these details will put customers at ease and customers will have a good first impression of the products or services they are about to be offered.
- Speed of service: Ideally, customers should have initial contact with a company employee within 90 seconds of their arrival. After two minutes, this is a failure. On the internet, if the page does not come up, customers do not wait for more than a few seconds before moving to another website. On the phone, you should avoid long menus of options and placing customers on hold, always giving them the option of speaking to an operator. If the company has an answering machine, it needs to make sure that it will call the customer back "on the same day" or "within four hours".
- Gracious and personalised welcome: Customers should be dealing with friendly, smiling staff. The SBAM method (smile, good morning, goodbye, thank you, in French) summarises the basics of customer relationship. A customer who is greeted by name, who is spontaneously offered his or her favourite table at a restaurant, whose voice is recognised on the phone or who has an item put aside while he or she decides, will have the feeling of being made welcome.
- After-sales service (Customer service): Good service does not stop with completion of the purchase. If customers are dissatisfied, they should be able to exchange the item or get a refund--without wasting time or spending money.
An entrepreneur wishing to improve quality of service can send his or her customers a questionnaire. But make sure you do not contact them this way too often, as it could irritate them or convey an unprofessional image.
Establishing customer loyalty
According to the Harvard Business Review, retaining a customer costs five to ten times less than acquiring a new one. A loyal customer also presents fewer risks for the company, because you know their financial situation and their ability to pay invoices on time. They also become a brand ambassador, singing the praises of products to their friends and family. This is extremely valuable, as most consumers are influenced by the opinion of their peers.
Pareto’s law postulates that 20% of the actions taken bring 80% of the results. Applied to sales, the principle is that 20% of customers generate 80% of purchases. You have to take care of this share of the clientele in particular. Conversely, 80% of the problems will be caused by 20% of the clients. Therefore, you are better off giving up trying to retain them. For the remaining 60%, you have to continue to go after them without investing too much time and money.
To locate these ideal customers, you need to analyze your sales (you can create a file of customers, listing all of their purchases and preferences), but also look at people who are most active on social networks and advertise the company.
Companies can adopt certain habits in order to create a relationship with their loyal customers.
- You want to create a relationship with your loyal customers. You should therefore remember them (and their tastes and preferences), call them by their names, treat them like VIPs and anticipate their demands.
- You should offer them discounts, special offers or a customized thank-you gift.
- From time to time, you should make an exception or bend the rules to please them.
- Provide follow-up after the sale. Contact consumers to find out whether they are satisfied with their purchase and whether there is anything else you can do for them.
- Mark important occasions (Christmas, birthdays) with a card and/or voucher for a discount on their next purchase.
The firm can formalize customer loyalty by establishing loyalty programs which reward repeat purchases. These programs also help gather information about your customer base and what these customers are buying. There are several types of loyalty programs:
- A discount or reward when the customer spends a certain amount on a single purchase (''free delivery or 10% off your next purchase when you spend at least CHF 50'')
- A discount or reward when they reach a certain level of spending over a given period (usually one year)
- A discount or reward when they accumulate a certain number of purchases (loyalty card)
- Surprise gifts (''because you've visited us 10 times this month, this coffee is free'')
Handling complaints
According to the "CX for Executives" study, for each person voicing his or her grievances, there are 26 other dissatisfied customers who say nothing but do not come back. Some will complain to their friends, however, or—worse—on social networks, which will generate negative publicity. In order to avoid such situations, a company must treat its unhappy customers with respect and courtesy and learn how to handle complaints efficiently and quickly. It may:
- Consider setting aside an area within the store for handling customer complaints, clearly marked as such. An e-mail address or hotline number on the website should allow problems to be reported quickly and easily.
- Solicit feedback by phone or email.
- Employees often represent a valuable source of information about which customers are not happy and why.
- An entrepreneur should be able to read non-verbal signs of dissatisfaction, e.g. customers pointing out that things are not what they used to be, often returning products, no longer paying compliments, etc.
Phone, mail, email, live chat, but also social media, forums and review platforms, customers can express their dissatisfaction across multiple channels. The most frequent complaints are about price, poor customer service or ineffective handling of complaints. Here is how to address these:
- Always begin by validating the opinion of the person you are dealing with, using a phrase like, "I understand your point of view". Avoid contradicting them from the outset.
- Listen to their complaint through to the very end: do not interrupt them, try to make excuses or blame a third party. Show empathy.
- Above all, do not make them fill out a complaint form, which gives the impression that the problem occurs on a regular basis.
- If the company is in the wrong, suggest an exchange or refund immediately and apologize. To really repair the relationship, you can add a discount on the next purchase or another form of compensation (a small gift, for example).
- If responsibility for the error is not clear, promise to look into the matter as promptly as possible and guarantee that the company will get back to the customer within 24 or 48 hours.
- Propose a customer follow-up: contact them again to find out if they are satisfied with the exchange or refund and the service they have received.
- Once the complaint has been resolved, consider if it is worthwhile adjusting how you operate so that it does not happen again. If it is, you can notify the customer who triggered the change, which will also increase their satisfaction.
Before discussions start, the company must find out how far it is prepared to go and what its limits are. Sometimes, it can be worthwhile to agree with the customer, even if they are wrong, as this will turn them into a loyal customer.
When a customer turns away from the company, there are several ways of winning them back:
- Contact them again to find out why they left and what you could have done to keep them. Sometimes, this simple gesture is enough.
- Remind them of the advantages of your products or services and why they were interested in your product in the first place.
- Propose a special offer or a different, extra service. You can also offer them a discount, but you then run the risk of them refusing to pay the full price in the future.
- If they cite the advantages provided by a competitor, do not try and undercut that competitor, but try to highlight your own advantages instead.
Some customers are chronically dissatisfied or have unrealistic expectations. Trying to meet those expectations jeopardizes the financial stability of the company. In these cases, it is often better to give up trying to get those people back and focus on your loyal customers instead.
