10 tips to ensure your new business venture will have the repeat customers it needs to survive.
Almost every store you visit these days hands you a “frequent flier” card - i.e. a loyalty card. Your wallet is undoubtedly stuffed with bait that companies use to lure you back time after time. After all, it’s easier and more profitable to generate business from repeat customers than to hunt for new ones.
For that reason start-ups (and in fact all businesses), must develop strategies for generating repeat business even before they start offering their product or service. The process begins with the business concept itself and continues with everything from how you answer the phone to how you keep your name in front of your customers. The mission is to cultivate loyal customers who not only keep coming back themselves, but who also spread the word to friends and family.
Developing this kind of solid customer base requires a mix of art and science. Creating memorable branding, for instance, is easier said than done. But there are some standard rules and tools you can use to help.
1. Build your business plan around a product or service that has a repeat buy. Razor manufacturers have razor blades; iPod has iTunes; beauty salons, accountants and grocers have services that people need again and again. It’s critical to either go into a business that has inherent repeat sales opportunities, or create a business model that will bring customers back on a recurring basis.
2. Never compete on price alone. If you do, there will be no reason for customers to return if a competitor has a better deal. You need to offer added value, whether it’s a strong guarantee or better call handling, to draw customers permanently into your fold.
3. Capture customer information. If you don’t know who your customers are, you can’t stay in touch with them. Gather names and contact information anyway you can. If you are an online business, you can offer opt-in registration for e-mail communications. If you are a brick-and-mortar establishment, you can offer a gift certificate for filling out a contact card, collect business cards in a fishbowl or give interesting information on feedback forms. Be creative.
4. Send handwritten thank-you notes. It’s old-fashioned, but it’s still a good way to show customers that you want their business. Just be sure it’s personalised. “Dear Valued Customer” will defeat the purpose.
5. Call your customers. Sometimes just asking for repeat business does the trick. Consider the case of a physiotherapist whose appointment book was getting noticeably thinner. She hired a part-time college student to call clients she had not seen for three months or more. The effort doubled her business at virtually no cost.
6. Send “it’s time” reminders. Dentists send cards; auto mechanics post stickers with odometer readings on your windshield to remind you of your next oil change. The same technique works in any business that offers regular or seasonal service. In one case, a hairdresser who started sending whatsapp reminders boosted business by decreasing the average time between haircuts from eight weeks to six weeks.
7. Create customer rewards programmes. Whether it’s a discount during the customer’s birthday month, “Buy 12 loaves of bread, get the 13th free” or an invitation-only sale for preferred customers, rewarding customers for loyalty is a good business practice.
8. Communicate through e-mail and direct-mail channels. Informing customers about promotions, new products or other news gives you an excuse to keep your business top-of-mind. And contrary to popular opinion, e-mail doesn’t require deep pockets or a technical staff. There are companies or apps that will handle both e-mail design and mailing for free or for few Rupees per customer.
9. Invest in leave-behinds. Calendars, refrigerator magnets, pens and mouse pads branded with your corporate identity are another tried-and-true method of reminding customers you exist. It’s hard for a customer to ignore something that’s staring him in the face.
10. Make customer service your top priority. There’s simply no substitute for the brand experience. If you can’t win battles like delivering on time and soothing customers’ ruffled feathers, you will lose the war.
Remember, the path to profitability is paved with repeat customers. There are as many ways to build repeat business as there are PIN codes, but you need to lay the groundwork from the minute you start writing your business plan. The goal is to sketch out a scheme that will create customers for life. If you can do that, you are at least halfway to ensuring your business will be around for the long haul.