Michael Cohen — May 16, 2018 — May 16, 2018
If you need a home repair or a new doctor, chances are you’re going to ask around your social network before hiring a professional. When people spend money, they want assurance that they’re going to get excellent service that meets their expectations. They’ll ask the people they trust most to recommend the best person for the job.
Personal referrals by loyal customers are an essential revenue engine for small businesses. So why are so many small businesses wasting their limited marketing budgets on advertising that may not even reach consumers who are in the market for their services? If your small business is focusing exclusively on acquisition marketing to generate new customers, you aren’t getting the most out of your dollars or efforts.
Small businesses have the benefit of personal relationships with customers, and these relationships are key to expanding marketing reach. According to Forrester, 70 percent of U.S. consumers say they trust brand and product recommendations from friends and family, and 80 percent of all purchases involve some form of word-of-mouth recommendation during the purchasing cycle.
Instead of getting caught up in acquisition marketing, small businesses should be focusing on their existing customer base. These customers are much more likely to come back when they need services again, and they are more likely to recommend a business to a friend.
Don’t be misguided into thinking the only way to increase revenue is to increase the number of new people you market to. In fact, building a loyal customer base is actually the best way to increase revenue, especially for small businesses. Instead of focusing on increasing the number of customers that walk through the door each day, focus on increasing the value of the experience for your existing customers, and encouraging them to recommend your business.
You are much more likely to increase business among existing customers than you are to convince unknown prospects to buy from you. This approach should focus on sending targeted messages to your loyal customers to keep your business top-of-mind. For optimal success, create a sophisticated digital customer engagement program that employs personalized messages that digitally surround your customers.
Here’s what it looks like:
- Connect with your customers on a regular basis with relevant information and offers—targeted messages you know matter to them.
- Let them know about other services you provide, so that when they need that new service, they’ll call you first.
- If you introduce a new service, be sure to share it with them.
- Collect your customers’ email addresses and mobile phone numbers when they are engaging with your business and use them in fully integrated marketing campaigns that go far beyond email blasting, including texting and social media.
- If you have an app, encourage customers to download it. The best apps are conversational and allow two-way communication through technology, such as chatbots.
By communicating with customers across multiple digital channels with messages that matter, you are more likely to engage with them in the way that best suits them, which increases the likelihood of a response. People appreciate this level of personalization from businesses and will share their experience with friends.
Small businesses often have small staffs, tight resources and limited marketing expertise, which requires working smarter, not harder, to get results. Don’t waste your resources trying to find new prospects, which can be costly and difficult to convert. Instead, develop a system to target your current customers and enable them to spread the word to their friends. By focusing marketing efforts on building loyalty among current clients, you are more likely to grow your business and revenue.
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