04 Jun
Smart: Focusing on customer retention rather than customer acquisition.
The well known Pareto principle (e.g. the Gartner Group) states that 20% of your customers drives as much as 80% of total revenue.
Stupid: Chasing the bargain-hunters.
Customers who came to your shop through a fantastic deal are likely only to come back for a similarly business-destroyingly good offer.
Smart: Connecting with your customers.
The personal connection can be the deciding factor when he or she decides where to go next time.
Stupid: Not being online.
In this day and age, a digital platform is really important. Many customers will look up the shop before they decide whether to go or not. It doesn’t have to be complicated or elaborate – even a Facebook page would do.
Smart: Rewarding loyalty.
Give something back to your paying customers, and they are much more likely to come back. Everyone loves a saving, even if it’s minor.
Stupid: Trying too hard.
Don’t attempt to reach everyone at the same time. Focus on your neighbourhood, their neighbours and their friends. If your shop is good enough, it will spread naturally.
Smart: Keeping it simple.
It might be tempting to offer an ever-increasing range of product and services. However, as a small shop, you might be better off specialising in a few things. This creates a higher level of expertise amongst your staff, and less competition with other shops. Be the best at what you do, and stick to it!
Stupid: Not realising the value of loyal customers.
A 5% increase in returning customers can lead to a huge increase in revenue – as much as 75%, according to Bain & Co. Loyal customers tend to spend more, and may bring their friends!
Smart: Focusing on what you have.
If you only have 10 customers, make sure they are given the best possible experience. They will share, and they will come back – spending more than those who came through an offer.
Stupid: Underestimating the power of word of mouth.
You don’t need expensive marketing. A little goes a long way, and word of mouth is by far the most powerful tool.
Smart: Relax and enjoy what you are doing.
Enthusiasm and happiness are infectious, and these are vital ingredients in a successful business.
Be smart!
