Posted by Nikoletta Ventseslavova

Read this if: you are an entrepreneur who spends too much on advertising and you need ideas for creating a business strategy; gain business ideas

Save: A reduction in customer acquisition costs

Cost to you: Significant effort in training your staff and instilling a sense of identity into your company.

The customer is king, consumer relations are important……..

Nowadays, most companies prefer to reduce their expenses and shrink their business rather than implement new strategies and product innovations. Statistics suggest that companies are halting new projects and are paying more attention to cutting costs whilst simultaneously generating new customers with increased advertising.

Theodore Kinni, co-owner of The Business Reader says: “Most companies spend the lion’s share of resources to attract a new customer. At the same time, more valuable, already profitable existing customers are walking out the back door unnoticed and uncared for.”

To address this problem, start with a reassessment of the relationships with each of your major customers and examining their loyalty; determine if they are willing to change their supplier in the near future. If you support your customers and show them your appreciation, they will do the same for  you.  Here’s a good example, taken from the book “1,001 Ways to Keep Customers Coming Back” :  “The“Hannadowns” program encourages customers to return their purchases when their kids have stopped wearing them. The returned clothes are cleaned and then donated to local charities. The customers get a 20% discount on their next order, Hanna keeps the customer buying, and the needy get 10,000 articles of returned clothing per month. Everybody wins.”

Also create a protection strategy insulating your customer from your competitors.  The key here is to focus on how you can increase customer’s switching cost without entering into price competition. In one of his articles T.B. Kinni gives the following advice: “Make it easier to buy from you than your competitor.”Keep it simple” is especially important for today’s high-speed world. Customers appreciate simplicity and convenience more than ever. UPS knows convenience is king in a busy world, so it created an elegant overnight package for customers, such as mortgage lenders, who send lots of documents that require signatures and return shipping. The company made a reusable envelope, so the recipient can simply sign the papers and ship them back in the same package.”

Make sure your customer realizes your value.  You need to know if clients understand exactly the extent to which your company performs and exceeds their requirements for each order, contract or service. Tell your customers what you have done for them. For example Nordstrom, Southwest Airlines and Ritz-Carlton Hotels have  are famous for: “ building their businesses by putting customers first. Consumers flock to them because of it. These companies are led by CEOs who are customer service champs. They recognize and reward employees that cater to customers; and, they brag about their accomplishments.”

Think about how you can provide additional value and business benefit to your customers.  Take into consideration the opinion of your sales staff, because they have daily contact with clients and they can help you to solve problems and achieve customer goals. Find out what clients ask for and give it to them. Don’t be afraid to interact with them.

Bring your goods and services to your clients and they’ll appreciate that. For example, At the Little Nell Hotel in Aspen, the owners don’t wait for guests to arrive to begin making them comfortable. The hotel calls each visitor prior to arrival to answer questions about the area and the hotel, make plans for dinners and address their special requests.

Differentiate your company and your product or service.  Develop innovative approaches and  try to offer more services, or plan advertising with special promotions for loyal customers. In this way the clients will be more satisfied and will appreciate your qualities.

And treat your trophy customers the best of all. If the Pareto Principle runs true at your company, you will find that the top 20 percent of your customers contribute 80 percent of sales!

Just before you go, a humorous look at what lack of competition can do to customer service:

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