Focusing on Your Customers Is Essential
In a survey by 4Salesforce, “customer satisfaction” was the number one marketing metric for small businesses. When customers are satisfied, they buy again, and repeat sales are the lifeblood of small businesses. Your customers want you to alleviate their pain. When you’re able to do this, this focus leads to a clear differentiation with competitors. And that leads to repeat sales.
How to Focus on Your Customers
Focusing on your customers is an excellent first step, but it doesn’t stop there. You need to make your customers successful. There are a few things I like to do:
Think strategically about their business. Step back from your daily grind and think about how your customers and prospects spend their time. What problems do they have now and in the future?
Listen to your customers. Actively solicit your customers’ opinions on how you’re doing. Use a survey such as NPS (Net Promoter Score) to measure the customer experience.
Solve customer problems. Know enough about your customer’s business that you can find their pain and solve their problems.
Manage customer relationships. Managing your customer relationships requires a single, unified view of each customer or prospect so you can then reach out to them at the right time with the right message. You’ll probably need a CRM (customer relationship management) system to do this.
Go above and beyond. Excellent customer service is table stakes in today’s competitive environment. You must not settle for “good enough.” Instead, aspire to a level of service that is truly memorable.
Invest in employees. Invest in training for your employees. Look for ways to educate them about the industry and build their skills so they can better serve your customers.
Keep improving. Always be looking for product and service improvements. Encourage an open feedback loop with customers.
4 https://www.salesforce.com/
Mistake #6
Not Segmenting Your Customers
I often hear small business owners say, “I don’t need segmentation. I know exactly who my customers are.” Or, when I ask them what customers they focus on, they say “everyone.” Really?
Segmentation allows you to aim and utilize your scarce dollars more effectively. Segmentation helps you with:
1 Targeting – By breaking customers into smaller groups, it’s possible to determine which ones are a good fit and which ones aren’t.
2 Pricing – Different customer groups will value your product or service differently. Segmentation allows you to price based on different perceived values.
3 Positioning – Having different segments allows you to position yourself against various competitors in those segments.
4 Promotion – You can be more relevant to customers and prospects by changing how you pitch your product or service.
5 Product – Even your product features can be altered to fit different segments because each segment has various problems.
How Do You Segment?
After you’ve determined your core or primary customer (see mistake #4), there will be other groups of customers that need your focus. These are called segments. In business-to-business marketing, a company might segment customers according to factors such as industry, number of employees, products purchased, and location. In consumer marketing, segments usually involve demographics like age, gender, marital status, location (urban, rural), or life stage (single, married, retired, etc.).
Whatever characteristics you pick, they should help you understand and predict how your customers will act. Sometimes the criteria aren’t demographic or geographic; they’re behavioral. Have customers exhibited behavior that makes them more likely to buy your product? Finally, make sure the segments are large enough to target. If you’ve refined the target segment so precisely that you only have 13 people in it, it won’t do you much good.
Developing your segments usually requires research. You’ll need to gather specific information about customers and analyze them to see if any patterns can be used to create segments. Here are the typical ways of getting customer information:
Face-to-face interviews
Surveys
General research using published data (e.g., trade journals)
Focus groups.
Mistake #7
Not Tracking Results
The question I hear most from small business owners is, “What will I get from my marketing dollars?” Linking the money spent back to results is a crucial principle of my Lean Marketing process. In Lean Marketing, guessing and estimating are replaced by data-driven analysis and measurable outcomes.
Every marketer should be able to answer the question, “Will this make me money?”
The goal is to know the desired outcome of your marketing before you spend a dime. You should think of marketing as an investment, much like any other—stocks, real estate, mutual funds, etc. When you do this, replace all marketing activities that do not provably generate revenue with ones that do.
I grew up in direct marketing, trying to find out what works and what doesn’t. However, today’s new digital marketing channels make it possible to measure success more quickly. Digital marketing has real-time access to a wide variety of information. Because digital data can connect knowledge across sources such as social, mobile, and web, results are usually just a click away.
How to Focus on Results
There are several steps small business owners can take to focus on outcomes:
Measure what’s important. Even if you don’t have much money for marketing, you benefit by focusing on those activities that generate revenue. You do this by concentrating on a few key metrics and tracking them daily. Chances are you’ll be using digital marketing, which has tons of parameters—an overwhelming number for most people looking at them. The real challenge is to narrow it down to just a vital few.
Track the total number of leads and how many of those qualify after your marketing and sales screens. Once you’ve done that, determine your cost per lead and cost per closed sale. Add on other essential metrics. Keep it at ten or less total, and don’t include any that don’t eventually directly lead to revenue (such as the number of likes).
Prune what doesn’t work. Results-based marketing forces you to change from marketing messages that create awareness to ads that generate results. Spending money on non-revenue-generating marketing is like spending money on equipment or people that don’t perform. It’s a waste, and it isn’t Lean. There’s also an opportunity cost involved. When you spend money on something that doesn’t work, you’re taking money away from something that does.
Expand from your core. Eventually, you’ll want to spend about 80 percent of your marketing dollars on activities that are proven successful. Use the remaining 20 percent to test new ideas. It ensures a consistent marketing funnel that produces results. Just remember, you want to test all the time, but you need to balance the testing with results.
Change Your Media Allocation. I’m biased here because of my background in direct marketing. But, how can you justify spending marketing dollars on things you can’t measure? To be a Lean Marketer, you need to switch your media allocation away from branding and image-based advertising to media that show results. For most small businesses, branding is a waste of money. Yes, you should have a consistent brand image. However,