The following article was published by the SBA.
When small business owners think about marketing, they usually think about attracting new customers. But existing customers are equally, if not more, important. A survey last year found that marketers spend on average just 21 percent of their marketing budgets on existing customers—even though these customers account for the majority of their revenues.
How can you reach out to your existing customers and convince them to buy more from you? Here are 7 ideas to try.
- Gather data on your customers. What do they buy? When? How much do they spend? Are they motivated by discounts, do they willingly pay full price or a combination of both? Look for a customer relationship management (CRM) system that works for your business — and use it. The more data you can collect, the better you will be able to personalize your outreach to existing customers, and the more effective it will be.
- Stay top-of-mind. You take out ads to build brand awareness among prospective customers, but how do you keep your business top-of-mind among existing customers so that they return to you next time they need what you sell? Regular communication is key. Send your customers print or email newsletters that serve as an ongoing reminder of your business — with the added bonus of alerting customers to new products, services and offers they may not be aware of.
- Make them feel special. Consider hosting special events just for your existing customers. This could be anything from an in-store, after-hours sale for a clothing boutique to a year-end banquet for a B2B business. Receiving an invitation will make customers feel valued. Continue the special feeling at the event by giving them something new customers don’t have access to, such as first crack at a new clothing line, or the chance to sign up for a new service you’re offering.
- Follow up after the sale. This tactic works well with B2B customers, service businesses or large purchases, such as home remodeling, landscaping or luxury products. At an appropriate time after the sale — anywhere from two weeks to a month, depending on what you sell — contact the customer to see how they are doing with the product or service. This enables you to answer questions, solve any problems and ideally sell the customer on complementary or related products or services.
- Get existing customers involved in developing new products and services. Are you getting ready to launch a new product or service? Invite existing customers to provide their input during the development stage by hosting focus groups, conducting surveys or letting them test the product. Because they will feel personally connected to the product or service, they’re more likely to buy it when you launch.
- Start a loyalty program for existing customers. Loyalty programs can work for just about any type of business. The most effective programs use a tiered system where customers start out by receiving smaller rewards for smaller purchases, then graduate to bigger rewards as they spend more. Make sure your rewards system is simple and easy to understand — too much fine print will turn customers off from using it.
- Celebrate special days. A customer’s birthday, wedding anniversary or the anniversary of the first time they do business with you are all natural times to reach out to existing customers. Send them a relevant card (email or paper, depending on your customer base) and include a gift or offer substantial enough to be meaningful.