Seth Godin runs one of the longest running and most popular marketing blogs online. He’s been writing for over a decade now, and constantly presents thoughts that are interesting and challenging. Lots of thought experiments, sometimes outright philosophical.
So you’re running a small business. You did the planning, you’ve set up shop, customers have been coming in. It’s been challenging but fulfilling. And now you’ve gotten to a sort of stable pattern, and you’ve started thinking about what’s next. How do you grow the business? How do you reach more people, get more customers?
Marketing a small business is tough, because of the many constraints. You’re not going to be able to hand over a big budget to a glitzy agency and tell them to ‘make it rain’. You’re not going to have the luxury of coming up with an elaborate, multi-part plan – you’re going to have to keep things simple, and get them done fast.
Here’s a list of things you could and should be doing.
1. Make sure your social media accounts are active and your site is search-friendly
One of the best examples of this of all time was Warby Parker’s hijacking of the New York Fashion Show – they invited the editors from the fashion show to a ‘secret event’ at a public library, where they had staffers staking out all the seats. Just before the editors showed up, the staffers exchanged seats with models.
What about if you’re just a little brick-and-mortar retailer along the sidewalk?
4. Do some niche marketing for your target audience
Every good product solves a problem for somebody. Even if your business serves a diverse group of people (say, a donut shop), there’s bound to be some pattern – you might notice that most of your best customers come from the nearby offices at a certain time of the day, for example. Maybe you could host some sort of ‘networking event’? Talk to your customers, and look for patterns.
Here’s a fun example – some Lululemon stores turn their stores into yoga studios after hours. This gives potential customers a judgement-free place to explore the brand, and help them to create a positive association with it. If they end up learning yoga and making friends at the store, and they’re going to need some yoga apparel and paraphrenelia, Lululemon becomes the obvious choice.
5. Try a loyalty program
Ever tried running a loyalty program? In the past, you had to do this with loyalty punch cards. This is often a tedious process – we’ve heard from our retailers that they spend too much money paying for the printing of the cards, and that customers get frustrated when they realize they’ve misplaced or forgotten their cards.
That’s why we made CandyBar – a modern loyalty program app for small businesses. No download necessary.
What makes their loyalty program so compelling? And what can businesses learn from them?
1. Great mobile app
It’s probably not a good idea for most retailers to build mobile apps just for their store – most people aren’t going to want to have a different mobile app for every single store that they happen to visit. Starbucks gets a “law of large numbers” advantage here.
In a way, people have come to expect Starbucks on every corner in major cities – like a reliable utility.
2. Online signup
Starbucks is one of those brands where fans actually might spend time thinking about the brand even when you’re not actually at the store or feeling the need for coffee. You can signup for Starbucks’ loyalty program online:
3. Special Gold card for extra-loyal customers
Having tiered levels of loyalty gives customers something to work towards.
Of course, few people are going to wake up in the morning thinking “Gosh, I really need that Starbucks Gold”, but it can tip people over when deciding whether or not to order that slice of molten chocolate cake with their cappuccino.
Starbucks’ loyalty program is a bit of an outlier.
Generally, Starbucks’ loyalty program is an example of what you can only really do when you have the massive scale they have.
Smaller businesses typically can’t afford to come up with such a complex, complicated solution, and they can’t expect their customers to invest so much time and energy into figuring out how the loyalty program works, either.
For most small retailers, you’re going to want to keep your loyalty programs as simple and easy to use as possible.
When we talk to our retailers, we find that practically all of them are in their line of work for more than just financial reasons. Several of them even quit high-paying jobs to do what they’re doing.
They want to make a difference to the lives of their customers, however small.
So let’s spend a few moments to think about how you could be more rigorous about that.
What do you need to do to make your customers happy?
1. Put together reasonably good product to begin with
While it would be good to have, you don’t actually need an insanely great product. As one of our retailers told us about his cold-pressed juices, “It’s not rocket science, anybody can do it.” Your product just needs to be reliably good enough for your customers.
Starbucks doesn’t make the best coffee in the world, and they don’t have to. They don’t sell “the best coffee”, they sell “pretty good coffee that’s reliable and familiar, in an environment that you enjoy.” That’s the ‘job’ that the product is hired to do.
Be very, very clear about your value proposition. About what makes you different from your competitors. About why your customers want to buy from you. When you make that clear to yourself, and to your customers, then your customers will find it easier to enjoy their experience around your business and product.
2. Have a pleasant ambience for your customers to enjoy
Which just goes to show that ambience and atmosphere can make a big difference when it comes to how your customers feel about your store. You don’t necessarily need to pull out all the stops – you just need to make it feel welcoming and ‘positive’ for your customers.
This post from InsideRetail explores how you can use all 5 senses to really create a great, memorable environment for your customers – one that they’ll want to return to.
3. Quality service from your staff
This is one of the harder parts. First, you want to make sure that you hire staff who have the right sort of personality and mindset.
Then you want to make sure that you treat them really well, so that they feel good about coming to work and feel good about giving your customers a great experience.
You also want to give your employees some autonomy to make decisions that will delight customers – few things are as frustrating for a customer as having to deal with unreasonably complicated return policies, and so on.
4. Provide a loyalty program
According to a Bond Brand Loyalty report, which surveyed over 11,000 consumers, loyalty programs actually have more influence on brand satisfaction than price or perception of value.
It’s sometimes debated that loyalty programs aren’t nearly as profitable as retailers would prefer. But in our experience, the main reason that retailers provide loyalty programs is that their customers ask for it.
Customers have grown to expect to be rewarded for their loyalty, and retailers (especially SMBs) want to do whatever it takes to make their customers happy.
Try CandyBar, a digital loyalty punchcard that gives your store a modern feel.
But you don’t need to be a massive hotel chain in order to surprise your customers with something a little extra. If you notice your customer looking a little down or frazzled, give them something ‘on the house’.
Not every single customer will appreciate it, but some of them definitely will – and they’ll be talking about it with their friends.
6. Respond well to negative feedback
Every so often you’re going to upset a customer, despite your good intentions and best efforts. This is unavoidable. How you respond to it, however, makes all the difference.
There have been many examples of this over the years on Facebook. Some business owners have very publicly dug themselves into a PR disaster by being mean or catty towards unhappy customers. Definitely avoid doing this.
Learn about what digital loyalty marketing is, how it works, why it’s so effective, and why we think you should get some digital loyalty punch cards setup for your small business.
Want a digital loyalty program for your store? Check out CandyBar.co!
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<a href=”http://www.candybar.co/blog/why-digital-loyalty”><img title=”Why You Should Run A Digital Loyalty Program [Infographic]” src=”https://www.candybar.co/wp-content/uploads/2017/03/CandyBar-Infographic-final.png” alt=”Why You Should Run A Digital Loyalty Program [Infographic]” width=”600″ /></a> <a href=”http://www.referralcandy.com”>CandyBar – Digital punch card loyalty program</a>
Text: Why you should have a digital loyalty program
In a milkshake bar not so far away…
Alice the customer: Awesome milkshake and great service! Love it!
Bob the bar owner: Thank you!
3 days later…
(Bob sees Alice buying milkshare from another shop)
Bob thinks to himself, “If people love my milkshake and service, why don’t they come back more often?”
Well, the truth is…
Customer satisfaction ≠ Customer loyalty
“There is a big difference between a satisfied customer and a loyal customer. Never settle for ‘Satisfied’.” – Shep Hyken, Customer Service Expert [source]
Customer loyalty doesn’t come by chance.
You have to actively build it!
Here’s an example:
Alice: Awesome milkshake and great service! Love it!
Bob: Thanks! Fancy getting a free milkshake on your third visit?
Here’s one way you can incentivize customers to be loyal. This is known as ‘Loyalty Marketing’
Loyalty Marketing is actively engaging and incentivizing customers to come back often.
Bob: Hmm… Is Loyalty Marketing really worth the effort?
Yes! Here’s some data and examples to prove it:
Starbucks’ loyalty program drove significant revenue and loyalty for the brand
“(My Starbucks Rewards) continues to be our most important business driver as new members contribute not only short-term increases in revenue and profit, but also to long-term loyalty for years to come.” – Howard Schultz, Starbucks CEO [source]
Loyalty program members buy 20% more frequently [Source]
Amazon Prime members spend more than non-members on average [Source]
73% of loyalty program members are more likely to recommend brands with good loyalty programs [source]
Loyalty Marketing works. It rewards your customers and drives more revenue and referrals for you.
Bob: If Loyalty Marketing is so good, why don’t all businesses already have it or do it well?
Good question! Here’s why:
It may not work well for some industries. (Such as: Automotive sales, Construction, Appliance repair, etc) One-time purchase industries are better off focusing improving their products and services and encouraging referrals.
A physical punch card loyalty program can be costly and labor intensive. From designing, printing, promoting to manually stamping them during every transaction, every step can add up to a huge amount of work.
Customers aren’t always fully engaged. Sometimes they forget to bring their punch cards, sometimes they lose their punch cards It is hard to track and measure impact. It’s a challenge to determine how many percent of the overall revenue can be attributed to loyalty program
Bob: Sounds daunting! Are you sure I can do Loyalty Marketing? I’m just a small business owner…
A digital loyalty program app would be ideal for you:
It’s easier and faster to set up and run
Customers can access their punch cards on their smartphones any time
Everything is tracked and measured automatically
More time for you to engage your customers and understand them better
A digital loyalty program app is a smart and easy way to incentivize your customers to come back often.
And this is why you should have a digital loyalty program.
Bob: Sounds good. Let’s do this!
Want a digital loyalty program for your store? Check out CandyBar.co!
As skewed as Dwight’s logic is, he did get one thing correct—that is, loyalty should be valued and pursued after. Certainly, the idea that customer acquisition is far more important than customer retention appears to be on the way out.
Numerous studies, polls, and industry experts have consistently demonstrated that cultivating a faithful repeating customer base is not only cost-effective, but highly lucrative.
And key to achieving such results comes in the form of loyalty programs, which may reward frequent customers with discounts, new products, free merchandise, gifts, and even company stock.
Here are five important statistics to further show you that romancing your existing customers is simply the right (and profitable) thing to do.
1) The 80/20 Rule – 20% of a company’s existing customers will generate 80% of its future revenue (Garnet)
In other words, you don’t have to search far for greener pastures, when all you have to do is tend to the one you’re standing on now.
2) It’s all in the Family – 63% of millennials share similar brand loyalties as their parents (Adroit)
According to a comprehensive Adroit Digital survey, around 63% of the millennials polled were loyal users of the same brands their parents follow. This discovery has some important implications.
For one, we see how brand loyalty can be passed down from generation to generation, with each tier strengthening that bond.
Second, the idea that young individuals display similar consuming patterns as their parents further dispels the false dichotomy between customer retention and customer acquisition. The two aren’t mutually exclusive.
Creating loyal customers out of parents means setting up their kids to be loyal customers too.
3) The Other 98% – Loyalty programs tend to over-reward the top 2% of customers (HBR)
The author’s point here then is that loyalty programs can alienate customers if they’re not careful. A good should be cater to the varying profitabilities of different customers, while never making them feel second-class.
4) Repeating customers spend 70% more in their 31st month than in their first six months with their preferred retailers (Bain)
“Patience, you must have,” said Master Jedi Yoda. Indeed, in a study published by Bain & Company, repeating customers were discovered to spent almost 70% more in their 31st month with retailers than in their initial six months.
As we’ve said before, it’s a marathon, and never a sprint.
5) Love Your Other Half – More than 50% of customers have switched brands due to poor customer service (Accenture)
In today’s digital, faceless age, you’d be forgiven for thinking customers don’t prioritise human contact. But apparently, they do. Market research by Accenture Strategy showed that 83% of American consumers prefer interacting with ‘human’ customer services.
Alarmingly, 52% have switched brands and service providers due to poor customer service, costing companies a loss of $1.6 trillion dollars.
What this shows is that human interaction remains a vital component in inducing customer loyalty. A well-designed loyalty program means little if customers feel like they’re interacting with robots, or worse, actual human beings who couldn’t care less.
20% of your existing customers will form the backbone of future profits and revenue
Customer retention and customer acquisition are not mutually exclusive
Be mindful if you’re privileging your ‘best’ customers at the expense of the majority
Long, meaningful company-customer relationships do pay off