By Jeff Hilton, Integrated Marketing Group
Of all the marketing "buzzwords" to enter into the corporate dialog over the past decade, probably one of the most valuable and insightful is the concept of relationship marketing. This terminology reflects the changing nature of the consumer in general...smarter, more selective, more suspicious and with more purchasing options than ever before. Particularly in today's natural products marketplace, there's no question that the consumer is "calling the shots." So smart marketers are approaching this consumer in new ways.
The customer universe is finite. It has also become much more segmented and therefore more difficult to effectively reach with any reasonable efficiency. So cultivating existing relationships has emerged as the key to long-term business success and growth. It's all about Lifetime Customer Value (LCV). In other words, what revenue and profit will a customer contribute to your bottom line over the course of their relationship with you?
Consider the following:
The Cost of a Lost Customer. For every customer you lose, you lose not only the next sale but also the one after that, and the one after that, and on and on. You get the picture.
The Cost of Acquiring a New Customer. Research shows that it is eight times more costly to find a new customer than it is to maintain a current one.
The Value of Loyal Customers. 90% of profit comes from repeat business. Each time a customer re-purchases your product, your cost of maintaining that customer decreases and your profit on that same customer increases.
The Increased Cost of Reaching New Customers. As natural products shoppers diversify, they are increasingly difficult to reach efficiently. Media vehicles will continue to become more segmented and more costly.
Clearly, it pays to build customer loyalty on many levels. So how do you go about building that relationship?
Use Your Web Site. Donât have one? Get one. Remember that the Internet is a huge mass of interrelated conversations. Turn your site into a resource for the visitor. Give them a reason to come back. Don't let them leave your site without connecting with you in some way. Then stay in touch if they are interested. Don't be a pest. Be helpful. Offer solutions. Be sincere.
Add to Your Database Every Day. In order to talk to your customers, you need to know who they are. Record their interactions with you. Coupons. Rebates. Free samples. Web site visits. Every day you should be able to add new names to a growing database. Then develop a program to reach out to them and build an ongoing relationship of trust.
Reward Their Loyalty. Everyone wants recognition. Your most frequent customers are no exception. What have you done for them lately? Special offers and promotions? Rebates or samples? Small things pay off big.
Educate Them at Every Opportunity. Remember that the customer is hungry for information. And he who educates and informs will win the sale. Seminars. Literature. Advertising. Direct mail. Merchandising. Itâs impossible to overkill on this one.
Your current customers are not only why you are in business, they are also what will keep you in business. Recognize them. Nurture them. Reward them. Loyalty will follow.
Jeff Hilton is co-founder and president of Integrated Marketing Group (IMG), a marketing and branding agency servicing a national and international clientele. Hilton has been recognized by Advertising Age as one of America's Top 100 Marketers and has more than 25 years of broad-based business experience, including 12 years spent within the natural products industry. He has guided the national brand-building efforts of numerous recognized consumer products including, Continental Airlines, Mrs. Field's Cookies and Major League Baseball.
Jeff Hilton, President -
(801) 538-0777 www.imgbranding.com