So you built a better mousetrap? Who Cares? Part 4.
In our previous posts:
Part one Small Business Building the Better Marketing Mousetrap, part two Creating Real Strategies for Small and Medium Sized Businesses,part three Looking for clients in all the right places? we saw the need to answer two really basic questions:
- So what? Which helps you focus on what makes your product unique in the market.
- Who cares? Which helps you identify your real consumer groups
These are basically the only two questions you need to answer before you start creating a marketing strategy.
Moving forward, there is a need to:
- Focus on features where your product is a clear winner and which are important to your customer.
- Build up features where your product is a clear winner but which might not be that relevant to your customer.
- Identify your customers by several factors: their size, amount of business and growth potential among others.
- Create a strategy to understand where your business will grow from.
Next question is: What do we need to do?
At Iffective we identify seven actions you can take with your customers:
1. Sell: This is your basic nuts-and-bolts action, selling your product or services to consumers. However, unless you are firmly in the one-night-stand business, selling is not enough.
2. Resell: Again, your basic nuts-and-bolts action. You should be reselling to all your clients all the time.
3. Retain: Everyone knows “Paretto’s Law” also known as the 80/20 rule. 80% of your business comes from 20% of your customers. In the CPA’s case (the example we are following) it is more extreme: 67% of the business comes from 12% of the customers. Considering the acquisition cost of new business, both in terms of money and effort, it makes all the sense in the world to have a continuous retention strategy in place.
Retention strategies run the entire gamut from constant communications (e.g., newsletters) to creating highly specific white papers on, say, new taxation legislation. Whatever route you choose, keep in mind:
- Our mailboxes are inundated with unwanted and no-longer-wanted newsletters and other communications. Make sure your recipients sign up.
- Keep the communication relevant, on-target and useful. I know, easier said than done. When in doubt, apply the “me” principle: “If someone sent me this… would I read it?”
There are other more viable retention strategies at your disposal. For example, you could hire an intern or assistant to call your top customers on a regular basis and ask them a simple question: “What else could we do to keep you happy?”
4. Cross Sell: Cross-selling is one of the most productive strategies a small or medium-sized business can have but, at the same time, one of the most difficult.
For example, for our CPA, an easy cross-sell would be to offer all the employees of its 39 businesses discounted tax returns. The difficulties in this case, can include: having to discount existing tax return clients (if applicable) and a hit to the margin if all employees were to take the CPA company on its offer.
Next- Actions 5 to 7 and Need for Plannning
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5. Upsell: Upselling –much like its cousin, cross-selling—is an easy growth strategy that is also difficult in real life.
To be successful, the upselling strategy needs to present a compelling case for the more expensive product being sold. If you are a furniture-rental company, for example, it is easy to try to move people from the $29.99 sofa to the $39.99 sofa. For the CPA company that we are following, it is more difficult. A possible upsell product would be liability insurance being offered at a discount and in conjunction with a strategy insurance broker ally.
Again, there are obvious dangers. For example, the company’s top 9 clients, which represent 32% of the business might insist on the insurance product being added to their business for free.
6. Referral Campaigns: by most account, Word of Mouth (WOM), is the strongest sales tool there is. A referral campaign, should leverage your existing customer base and create some good WOM.
The typical referral campaign usually has two incentives: an incentive for the person generating the referral and an incentive for the person who becomes a new client. Naturally, referral campaigns have challenges of their own.
- To begin with, you must come up with an incentive that, while being attractive to both parties, does not impact your margin too strongly.
- Also, the incentive should have a limited life in order to add urgency to the campaign.
- The incentive should also be a one-time offer so that both parties can be upsold later on.
- Finally, the incentive (at least the one directed at the referrer) should be “stackable”, that is, the person making referrals should be able to have more than one of the incentives (e.g., beautiful pen sets) so that the person will refer multiple people
7. Retarget: Retargeting is one of the most successful new-business practices in the web. Basically, everyone visiting your website gets a tracking cookie.
Then, as they move away from your website (if they have not registered, for example) advertising is served to them specifically about your website. Retargeting can be seen as an invitation to come back to your website. A word of warning, retargeting only works when you have a good number of visitors to your website.
The need for planning.
All of this is not going to happen by either osmosis or sheer coincidence. You need to sit down and plan both the timing and the content of the different actions. To do that, the best idea is to develop a calendar. We’ll do that in the next post.
Related articles:
Looking for clients in all the right places?
Small Business Building the Better Marketing Mousetra
Creating Real Strategies for Small and Medium Sized Businesses,