Your existing customers are a huge asset to your business. Repeat and referral business from them can be a powerful, low-cost marketing strategy, so maintaining strong relationships with them is crucial to retaining their loyalty. Yet many small businesses invest most of their marketing budget on finding new customers instead of nurturing the ones they already have, in spite of the fact that acquiring a new customer can be five times as expensive as retaining an existing one. But it doesn’t have to be like that, as these four business founders have discovered.
Repp Media is a global PR agency for public figures, and as a service-based company, gaining new customers whilst ensuring their current customers don’t lose out is crucial. Their solution to managing this fine balancing act has been to offer rewards to current customers through a referral scheme.
“If they refer someone and we work with them, our current customer will get between 10% and 20% of their retainer, which could run into thousands of dollars,” says director Matt Alexander. “This approach also strengthens your network, as you are working with people who are all connected in some way, and you can use this opportunity to help your new customers by using a current customers expertise.”
As an example, last year Repp Media started working with a well-known musician who was recording a music video and needed a model. “We have a few models on our books, so we introduced the two parties, brokering a great deal for both,” says Alexander. “The model had some great exposure and got paid, while the new client, the musician, got a high profile model for their video and saved a lot of time looking for someone.”
Pro bono work
Launched in 2018, personal branding agency WOAW has seen its monthly revenues increase from £9,000 to £50,000 in less than 18 months. Many of its original clients, including leading business founders and CEOs, are still on board, while new clients join the agency via LinkedIn, where founder and director Joe Binder has focused on building his own personal brand.
One of Binder’s tips for entrepreneurs aiming to build and retain a strong customer base is to offer pro bono work. “We previously did it in return for testimonials and those have been priceless in signing other clients ever since,” he says.
Data-driven customer engagement
Beauty tech start-up Smell was set up by university friends Armaan Mehta and Karan Gupta in 2018, with the goal of transforming traditional ways in which brands offered samples to consumers. According to the founders, the key to winning new customers and retaining old ones is the same: build engagement and research into the customer journey to find out what makes people tick, and tailor your offer accordingly to suit different audiences.
“Digital experiences, such as an interactive quiz or feedback survey, with a prize incentive, provide opportunities that are more meaningful to the individual, while simultaneously helping you gather useful data,” says Mehta. “As a prospective customer, in return for your data, you might get a free sample that encourages you to return. For a returning customer, the same sample could be a reward for repeat custom and helpful feedback.”
His advice is to offer a range of incentives so that the prize that people choose sheds more light on their interests; micro-interactions that allow the business owner glean to glean valuable insights and target interested audiences with the things that matter most to them.
“Businesses need to treasure this information like gold dust, and use it to personalize future interactions with individual customers, targeting them at the right time, in the right place, with the right product or service,” he says. “This is how you convert newcomers, while driving loyalty in existing customers: through continued engagement and data-driven personal touches that add value to customers and show them that you care.”
Dedicated customer service
Many entrepreneurs are hungry to chase for new business and secure the next deal, but it’s important to always be thinking about their existing customers. Property investment firm Fabrik Invest has a dedicated after-care team whose main job is to ensure that its existing customers are happy, feel valued, and always kept fully up to date.
“Small things such as remembering your customer’s birthday and sending them a personalized gift can make all the difference,” says managing director Dale Anderson. “Sales departments can get so caught up in working with new leads and focusing on generating new business, and in my experience, this is missing a trick, as keeping a good rapport and relationship with your existing clients can result in up to 50% more sales, certainly within the property industry.”