Economic pressures are forcing businesses to use innovative solutions to stay afloat in today's stagnant marketplace. A recent New York Times article explored the question of how to raise prices on products or services to meet the higher costs of running a business without losing existing customers. That question is not an easy one to answer, especially in the current economy, and making the wrong move could be devastating.
It is absolutely vital to know your customer's pain points, as well as to establish the degree of loyalty they will have to your company if prices were to increase. To find out this information, businesses need to delve into the minds of their customers and acquire in-depth insight on how they think, feel and behave when selecting products, services and vendors. By gaining a third-party, unbiased and objective perspective on customers' needs, not only will customers often reveal more information to this objective party, but businesses can better understand the customers' needs and viewpoints. With this crucial information coming straight from the source, businesses can confidently embark on new sales initiatives with fresh intelligence their competitors do not have.
According to a recent article, the No. 1 reason businesses lose customers is because they feel unappreciated -- in fact, 68 percent cite this as the main reason they discontinue use of a product or service. Additionally, research shows that it is five to eight times more costly to gain a new customer as opposed to retaining an existing one when you factor in the cost of advertising, Internet marketing, mailers, etc., to reach out to new business.
Lastly, while many organizations are decreasing marketing and business development budgets to help the bottom line, now is actually the most important time to stay fresh in the minds of the consumer, and to develop and strengthen existing relationships. To help your company stay ahead in today's market, here are five tips from our experts.
Give customers what they want. Implement client surveys, informal or formal, to poll your customers for their feedback. It can be as simple as making phone calls personally to key clients to find out where there is room for improvement.
Dig deeper into existing client relationships. Initiate client retention programs to help build deeper relationships, while also exploring further business opportunities by introducing them to additional services that you offer. Suggestions might be to take clients golfing, or take them for coffee if on a tighter budget.
Stay in touch. Stay present with your clients by sponsoring client appreciation events such as an informative speaker and networking gatherings. A useful tip to cut costs is to partner with other business associates or other resources such as your Chamber of Commerce to host the event.
Leverage outside resources. Especially if you are a small business with a limited marketing budget, there are many invaluable outside resources to increase your marketing reach. An example is the variety of easy to use online tools for e-mail marketing such as Constant Contact, which allow you to create and deploy monthly client newsletters without any design know-how. For higher strategy and research needs, consider bringing in an expert to guide your initiatives.
Develop relationships for future business, even if it's not there today. Take advantage of this time to cultivate contacts and build new relationships. A monthly newsletter is a simple way to stay top of mind with your contacts -- even if they aren't clients yet.
When a leading technology company launching a new product needed an in-depth understanding of the multifaceted market and its target consumer, Bainbridge was engaged to gather market and customer intelligence through research and analysis to determine positioning gaps and competitor's strengths and weaknesses. This research also helped determine the organization's key decision makers, company and competitor perceptions, unmet customer needs and key vendor switching points. Ultimately, the insight gained helped the company fine-tune its sales and marketing strategy, secure a stronger market position and outmaneuver its competition.
Although it may be a tough time for the U.S. economy, there are creative and innovative ways that businesses, both large and small, can avoid the common pitfalls. By utilizing some of the simple tips and tools available to keep and grow customer accounts, you can not only make it through the slow times, but be that much farther ahead when things turn around for the better.
Chini is managing principal at Bainbridge, a boutique firm specializing in strategic consulting and capital advisory.