Odds are, if you’re reading this article, you have a business that has customers. Connecting with those customers is key to creating stand-out customer experiences, maximizing profitability and managing your cash flow. The first step to connecting with your customers and creating outstanding customer experiences is understanding what your customers are worth to you.
1. Do the math
Far from being expendable or replaceable, customers are a scarce and valuable commodity—the soil in which your business grows. And before you can effectively build out your customer base, you absolutely need to know these 3 numbers:
- Customer Lifetime Value (LTV). Simply, LTV is the value a customer brings to your business, the amount of money a customer spends with your business in their lifetime. The LTV can help you understand exactly what a customer is worth to you. And this worksheet can help you calculate the average LTV.
- Customer Acquisition Cost (CAC). Your CAC tells you what it costs to acquire a new customer. The CAC is key to understanding how much to invest in acquiring new customers. See #4 in this post to see how it’s calculated.
- Conversion Rate (CR). Your CR tells you how many prospects convert to customers. Your CR can help you gauge the success and effectiveness of your marketing. Read #6 in this post to for the calculation.
With these 3 numbers in-hand, we can move on to ways you can connect with existing customers and begin to attract new ones.
2. Know your customers
To really connect with your customers, you have to know who they are and what makes them tick. Get to know your customers better with these tactics.
- Dialogues. Dialogues aren’t just about greeting customers and knowing their names; dialogues are about creating a comfortable way for customers to share ideas and feedback. Since customers can be hesitant to honestly tell you what’s working and what’s not, tools like feedback apps and surveys can be exceptionally useful in providing a safe place for customers to share feedback—the good, the bad, and even the ugly. To help manage feedback and surveys, Clover offers several survey apps in the App Market, like Customer Survey and Customer Connect. Be sure to tap your best customers for their feedback, too.
- Segments. Knowing your customers also means figuring out who your customer segments are and why. Customer or market segments typically share attributes, likes or dislikes, that differentiate that group from others. For example, because they’ve shared generational experiences, Boomer customers may respond differently to products or marketing messages than Millennials. A good place to start digging for customer insights is Google Analytics or the data you may be collecting from your website. When segmenting your customers, be sure to take time to understand who your best customers are and observe the attributes they share.
- Personas. Understanding your segments can also help you identify customer personas, fictional characters that you create to represent your key customer segments. Based on common characteristics, attitudes and behaviors, personas make your customer segments tangible—they put a name and face on that group. And they can be a useful reminder of customer needs, wants and buying habits when you’re designing new products, programs to attract key customer types and marketing campaigns.
3. Engage and reward customers
After you have a handle on your customers—their likes and their dislikes—it’s time to engage them in a relationship with your business and reward them for their loyalty.
- Service. Providing stellar service is a front-line way to build relationships. Take shopping lines, for example. They can mean different things to different people. To a business owner, they mean business is booming. To a customer, they could represent a must-have product worth waiting for, or they could represent a total time killer. Using tactics like line-busting shows customers you respect their time, value their business, and want to create a great, win-win experience. And great experiences can mean more customers and more cash flow.
- Loyalty Programs. Have you ever gotten a birthday card or email from a business? Sure, it’s nice. You were remembered. But what if that card contained something more—maybe a coupon for a discount, a free download, or a free drink. Something that acknowledges you’re a customer and you’re appreciated. Something that creates an opportunity for engagement and transaction. That’s what a great loyalty program does. It not only recognizes a customer’s loyalty, it creates an opportunity to engage. Before you set out to design your loyalty program, check out these 6 questions to ask when crafting a winning customer loyalty program.
- Rewards. Similar to loyalty programs, reward programs are slightly different in that they incentivize customers to engage and transact with your business. It’s true that setting up and tracking rewards programs can seem daunting. So Clover offers apps like Customer Connect Rewards and Rewards to make managing rewards programs a snap. And be sure to check out page 12 of this ebook for more ideas on rewards program. Finally, remember your personas can be instrumental in designing awesome perks for your customers.
4. Deepen relationships
Relationship deepening isn’t hard sales. Rather, it’s about understanding your customers—their needs as well as their likes—and presenting them with products or services that are relevant to them. Simply, it’s engaging customers with more of your products and services, more frequently. After all, the more products and services your customers use, the more likely they are to keep using your products and services. The key? Cross-selling and upselling. Here are a few ideas.
- Captivate your customers. Retailers often see a spike in holiday or seasonal customers. The retail opportunity is to transform occasional, holiday or seasonal shoppers into frequent customers—to increase the frequency of their visits and transactions. Check out this post for helpful tips on turning occasional shoppers into loyal regulars.
- Tailor your business. Your customers may love your product, but if your product isn’t available to them in a way they can access it, they’ll likely find another product that is. Consider tailoring your business to the way customers want to shop. That may mean adding a shopping cart to your website, presenting product info on your social channels or changing the hours of your urban shop to accommodate the business crowd.
- Train your team. Your employees are the face, voice, and hands of your business to your customers. So training your team to create effective customer interactions is essential to upselling and cross-selling your products and services to customers.
- Create events. One of the best ways to introduce new products or expose your customers to products they simply may not be using yet is to create an event they can participate in. Maybe you host a class that showcases new kitchen tools your shop carries, a webinar that highlights important info from the books you’ve started selling, or a presentation by a new personal trainer in your gym. The possibilities are wide open. Remember to think about your customer segments, your personas, and what would be relevant and interesting to them.
5. Turn disappointments into delight
One of the greatest opportunities businesses have is to turn bad or disappointing customer experiences around and blow customer expectations out of the water. It starts with preparation.
- Coach your service team. Generally, customers engage customer service when there’s a question or a problem. Sometimes customers know what kind of resolution they want and sometimes they don’t. So coach your team to listen patiently and respond positively to customers. Your service team is your front-line, and they’re the ones that create the impression your customers will have of your business.
- Listen to online reviews. Recent research suggests over 90 percent of customers read online reviews before making a purchase decision and almost 80 percent trust reviews as much as a personal recommendation. Fortunately, Yelp for Business Owners in the Clover App Market puts the power of Yelp at your fingertips and gives you the ability to respond to customer messages and reviews with a private message or public comment right from your Clover dashboard.
- Stay on top of customer complaints. Part of dealing with the public is dealing with complaints. And they can arrive through every channel—an angry email, a persnickety post, even a livid letter. Some complaints are legit—mistakes and accidents happen—but others? Maybe not. The trick is knowing which is which, and avoiding the temptation to dismiss complaints that don’t seem to be legit. Remember that each customer has a network, and each customer encounter is an opportunity to blow past expectations. Check out this post for ideas that can help you manage serious customer complaints.
6. Attract new customers through existing customers
Finding new customers can be a challenge. Most marketers know that one of the most effective ways to attract new customers is to harness the power of customer testimonials and referrals.
Customer testimonials are powerful. A recent survey revealed that 97% of consumers went online last year for information about local businesses. And 85% put as much trust in online reviews as personal recommendations. Crafting a standout online reputation through customer testimonials is a journey made one step at a time. And these three steps can start you on your way:
- Listen. Start by learning what’s being said about your business to get a realistic picture of your online reputation. Fortunately, a simple search and a scan of your social profiles can offer a good feel for what’s being said about your business online.
- Engage. You can learn from your fans and your critics alike. Apps like Feedback in the Clover App Market help you engage in and stay on top of customers conversations.
- Incorporate. After you have a good picture of what your fans and critics are saying, infuse positive customer testimonials into your marketing. That gives your customers a voice to share their positive experiences and lets you market your business through a source customers trust—other customers. Check out #3 in this post before you start for important info about collecting and using customer testimonials.
Referral marketing is a great way to attract new customers and retain your existing customers. Consider, for example, a program that offers your customers cash back for every item their friends purchase from your business. That program, if managed well, is likely to help you retain your customers and make engaged customers of their friends. And Clover apps like Customer Referral Rewards make it easier than you think to set up and manage a referral program.
Whatever tactics you choose to connect with customers, build deeper relationships and drive better customer experiences, one thing’s certain: results can vary. Sometimes, one tactic may be wildly successful, and another time, it could fizzle. As you build out your plan to connect with existing customers and attract new ones, keep these tips in mind.
- Welcome new customers. When you get new customers, welcome them with open arms. Introduce a new customer welcome kit. Make customers feel special and glad they chose to do business with you.
- Expect failure. We learn most when we fail, so expect some failures along the way. Maybe it’s a campaign that doesn’t resonate. Maybe it’s a customer group that you just can’t reach. Failure means you’re learning and growing. Most marketers know the real trick to failing is to fail fast, get up, and move forward.
Clover is sold by leading U.S. banks including Bank of America, BBVA, Citi, PNC, SunTrust and Wells Fargo. You’ll also find Clover at our trusted partners including CardConnect, Restaurant Depot, and Sam’s Club. For more information, visit us at clover.com.