Wyoming Business Tips for Dec. 9-Dec. 14
A weekly look at Wyoming business questions from the Wyoming Small Business Development Center (WSBDC), part of WyomingEntrepreneur.Biz, a collection of business assistance programs at the University of Wyoming.
Mike Lambert, Wyoming Market Research Center manager
“The business world is really changing. How do I retain my loyal customers in today’s environment?” Charles, Casper
Times haven’t changed that much, but new tools that keep customers happy are available and actually work more like things did in my great grandfather’s time.
Back then, you purchased from the retailer down the street. You knew him and he knew you and your family. There was a relationship, and, with that relationship, came flexibility. The old “mom and pop” stores often ran tabs, gave discounts and remembered what their customers liked. Then came the age of mass marketing where consumers were numbers and entries on a balance sheet -- personal approach was lost.
What’s happening today is a return to the times when merchants and customers had personal relationships. The difference is that technology has opened a window to enable these relationships to occur between people who are located great distances from each other. Karl Wirth, writing on the Marketing Profs website, discusses the “7 P’s of Customer Retention,” which are:
-- People. To retain customers, you need to build a relationship with customers as people, not just as customers. Start by hiring people who show they care about others. Many companies now have a “chief customer officer” to ensure that the entire company maintains a people focus.
-- Product. Without the right product, you won’t really be able to accomplish any of the “P’s.” Make sure your product provides value quickly, retains value over time and is of high quality. Commodity items generally don’t have loyal customers, so make sure your product is special.
-- Place. Location matters when you are locating a physical store but, if you are an online retailer, place still matters. Your site needs to be easy to find, easy to navigate and friendly to the customers. What goes for “bricks and mortar” goes for online merchants as well.
-- Price. If you have a relationship with your customer as a person, then you take care of each other. The new expectation is that customers expect retailers to look after them. This can be by providing deals for returning customers or by adding services or features without charging more. Turn your employees loose and they will help you find ways to maintain this relationship.
-- Promotion. You should promote to existing customers differently than you do to potential customers. Why? Because you should know them. Target promotions to your customers based on their likes and needs.
-- Processes. This is where new technology comes in. Where the old corner store owner knew his customers by chatting with them when they came in, today’s businesses should use social media, customer surveys and other tools to engage and understand their customers.
-- Positioning. Wirth says, “If you want to retain your customers, you have to know who you are and communicate that clearly and repeatedly to them so they know who you are as well. Foremost, however, is this: Your actions must communicate your positioning. Those actions are showcased in the people you hire, the product you ship or service you deliver, the price you charge and the discounts you provide, the place and promotions you choose, and the processes you put in place. Combined, your words and actions say ‘This is who we are and what you can expect of us.’”
Bottom line: If you want to succeed with today’s customers, put on your great grandpa’s store apron, and adopt his attitude of treating customers like friends and neighbors, rather than numbers and profit centers. You’ll find your customers respond positively. A blog version of this article and an opportunity to post comments is available at http://www.wyomingentrepreneur.typepad.com/blog/.
The WSBDC is a partnership of the U.S. Small Business Administration, the Wyoming Business Council and the University of Wyoming. To ask a question, call 1-800-348-5194, email firstname.lastname@example.org or write 1000 E. University Ave., Dept. 3922, Laramie, WY, 82071-3922.