Contrary to popular belief, secrets aren’t what make businesses successful. Often the simplest changes can have huge improvements on your business. If you want your business to succeed, forget about searching for secrets and focus on the following simple strategies.
1. Understand where your customers are coming from
Understanding where your customers are coming from gives you clarity. Companies with a clear understanding of customer acquisition are in control. Successful businesses always seek to understand how customers find out about them. Asking a simple question such as “How did you hear about us?” can provide you with great insight.
It is insufficient to know how you acquired your last few customers. One of the keys to building a successful business is to understand where each and every one of your customers are coming from. The process is simple. You simply ask each customer. Make it part of your business culture to know. When you ask “How did you find us?” you will learn whether it was word-of-mouth, email, search engine, advertising, a trade show, a mailer, or social media.
Understanding where your customers are coming from enables you to start scaling your business. It empowers you because it tells you what works and what doesn’t. Do more of what works and less of what is ineffective. Businesses that are more likely to succeed can tell you their most effective customer acquisition channels. Key Performance Indicators such as customer acquisition channels are essential to understand and grow your business.
2. Customer Acquisition Cost (CAC) and Customer Lifetime Value (CLV)
CAC tells you how much it costs to acquire a new customer. CAC is essentially your cost of sales and marketing. If you don’t understand this number, you can’t justify spending on sales and marketing. CLV is the profit attributed to the entire future relationship of a customer.
We use the CAC and CLV in conjunction. For example, if your CLV is $300 per customer and your CAC is $600 your business is in trouble because you are spending twice as much as you are earning. Your CAC must be less than your CLV if you want to stay in business. In the above scenario you either have to increase your CLV or decrease your CAC.
Understanding the relationship between your CAC and CLV is crucial. Both are real numbers with an actual dollar value you can measure. The numbers may change over time and as they do you will be able to make the necessary adjustments.
3. Emailing your prospects and your current and past customers
Email marketing offers a simple and cost effective way to communicate yet most businesses continue to ignore it. Sending one or two emails here and there is not enough. Proper email marketing is about staying in touch. The most effective tool to stay connected is email. You should email your lists at least once a month. Depending on your industry or the seasonality of your business, you might need to adjust the frequency, but the key is to email regularly.
There are at least three groups you should email; your prospects, your current customers, and your past customers. Your prospects may not yet be ready to become customers, but you must continue to engage them. Educate them about your products or services, provide customer testimonials. Think less about selling and more about providing value through guidance, training, and education. As a direct result of email marketing your prospects will view you as an authority instead of someone that is simply trying to sell something. Your current customers may be interested in a new product or service you offer. You can also ask their feedback to improve a product or service.
Email your past customers to let them know what’s new. Have you introduced a new product or service? Have you made improvements? Offer incentives to encourage them to return or to refer others. Maintaining contact through regular emails with your past customers gives you a chance to stay top of mind when they are ready to buy, again.
4. Ask for feedback
Some businesses are concerned about asking for feedback because they are afraid of negative feedback. In business, no news is never good news. The reality is that your business will benefit more from negative feedback than no feedback. Feedback also gives an outsider’s point of view. It gives you a chance to understand what your customers like and don’t like. It helps you to make adjustments. Asking for feedback allows your customers to feel important. We all want to think that our opinions matter and your customers are no exception. Think of customer feedback as free advice you are getting from those that matter the most, your customers.
Any business that wants to succeed should strive to continuously improve. When you ask for feedback you show that you are willing to turn a wrong into a right. We often hear customers rave about companies that managed to turn a negative experience into a positive one.
Some frequently asked customer feedback questions are; “Would you refer us to your friends?, What did you like the most about our product/service?, What did you like the least about working with our company?” Asking for feedback will make you a better company.
5. Decide the role of social media in your business
Social media is here to stay, and if you won’t use it your competitors will. The question is not “Should I use social media?” it is “What social media platform should I use?” If you haven’t used social media, it can be overwhelming at first. The key is to take it one step at a time. Don’t try to be on all social platforms. Instead focus on one or two to start. Also, keep in mind that your social strategy will be different if you are a B2C business than if you are a B2B business. For example, while facebook is an excellent platform for B2C brands, Linkedin is generally more effective for B2B companies.
One of the most common excuse for the lack of social media is time. You can accomplish a lot in a little time. In a few minutes you could post a company update on facebook, or share a press release on Linkedin.
Social media empowers you to grow your focus of influence. It helps you introduce new products and services. Social media can be your tool to solicit customer feedback. There is nothing magical about social media. It is simply a tool you can use every day to improve your business and to make you more competitive. It will provide you with opportunities to stay connected and in front of your prospects and current and past customers.