Excellent customer service is key to the success of a small and home-based business. In fact, a superior customer service is your primary weapon against giant retailers and big businesses like Wal-Mart.
To be able to offer excellent customer service, however, you first need to know and anticipate what your customers want. You should know how to reach, satisfy and track your best customers. And the best way to predict what your customers want is if you have an accurate history of their purchase history.
Information about your customers can significantly help shape your business and marketing decisions. Specifically, the benefits of gathering and analyzing customer information to your business are:
1. Maximizes revenue and profits.
Getting new customers can be expensive. Marketers have found that it is five times easier and profitable to retain current customers than generate business from new customers. Analyzing information from your existing pool of customers allows you to identify your best current and potential customers and allocate resources strategically to maximize returns to the company. You can shift your resources from expensive new customer acquisition strategies to the less expensive customer retention strategies.
In addition, knowing key information about customers can make help you develop marketing strategies more attuned to your current and potential customers’ need. As a result, you can increase the frequency (number of times a customer buys), range (cross-selling of additional products), and value of customer purchase (pushing more expensive product lines to customer). You make better-informed decisions about your customers; hence you market and operate smarter, faster and more cost effective than your competition. This in turn improves customer loyalty and contributes to a better bottom line.
2. Improves customer relationship.
Businesses who are able to meet the needs and interests of their customers are more likely to develop lasting relationships with them. Understanding your customers is the first step to ensuring a loyal base of customers. If you know the who, when, where and how of your customer, you are will be able to personalize communications, offer a more individualized customer service, or direct specific promotions targeted to exceed customer expectations, which in turn could further cement the customer/business relationship.
3. Maximizes the value of customers.
Your goal is to ensure that your customers keep coming back to you again and again. You can achieve this by identifying continuity and cross-selling opportunities to keep them reigned in to your business.
If you are running a subscription-based web site, for example, you want your members to continue their subscription year-after-year and purchase your other products (e.g. books, downloadable e-books, etc.). If you are selling men’s clothing, you want the buyer to purchase a tie in addition to the shirt already purchased. If you are a web designer, you want your client, who originally asked you to create their web site, to also purchase your search engine optimization services, create their advertising creatives, or other ancillary services that you offer.
Keeping track of your dealings with your customers will allow you to identify the “one time only” triers, the repeat purchasers, and the loyal customers. Your goal is to be able to convert your single transaction customers into a regular, and hopefully, loyal customers in the long run.
4. Lowers your costs.
A better understanding of your customers allows you to craft the right marketing and customer communication programs. Customer data can give you information about your customer’s habits and needs allowing you to better tailor your marketing campaigns, including timing and frequency of promotions. You will be spared with the expense of trial-and-error campaigns and ineffective marketing efforts resulting from inadequate customer information.
Read the following articles on knowing about your customers:
- Knowing Customers is the Key
- How to Find Your Target Market
- Shotgun vs Rifle Approach to Marketing Your Home Business
- How to Find Your Target Market
- Benefits of Getting and Analyzing Information About Your Customers
Recommended Books on Getting Information About Customers:
- What the Customer Wants You to Know: How Everybody Needs to Think Differently About Sales
- Successful Marketing Research: The Complete Guide to Getting and Using Essential Information About Your Customers and Competitors (Wiley Small Business Editions)
- Mining the Social Web: Analyzing Data from Facebook, Twitter, LinkedIn, and Other Social Media Sites
- The Loyalty Leap: Turning Customer Information into Customer Intimacy
- What Customers Want: Using Outcome-Driven Innovation to Create Breakthrough Products and Services
Category: Market Research