Customer erosion is a problem forany business, large or small. No matter how low your prices are or howprofessionally you serve your customers, a percentage of your customer basewill inevitably disappear over time due to relocation, disinterest or competition.
Given that customer erosion is aninescapable reality of the business world, what can you, a small-businessowner, do to combat the impact of customer erosion? Simple: Expand yourcustomer base.
Replacing business that is lost tocustomer erosion through building new customer relationships will help keepyour business strong and profitable. In addition, if you impress new customerswith a combination of professionalism and friendliness, many of them willrecommend your business to their family and friends, further expanding yourcustomer base. So, how do you get new customers to visit your business in thefirst place?
The best way to expand yourcustomer base is through targeted, measurable marketing methods. Speaking to aspecific customer group and evaluating the results of your efforts will allowyou to tailor your strategies gradually to achieve the highest ROI possible.
In the context of this article, Iam going to focus on a specific customer segment that offers tremendouspotential to local business owners: ‘new movers.’
New movers are individuals whohave recently arrived in a new town and are unfamiliar with the area and itslocal businesses.
When individuals and familiesmove, their entire lives are turned upside down. Relocation typically follows asignificant life change (marriage, divorce, new career opportunities) and oftenplaces tremendous stress on the mover. In addition, once they have completedtheir move, new residents must establish new routines, find new localbusinesses with which to do business and begin integrating themselves intotheir community.
Studies have shown that 67% of newmovers rate finding an honest, reliable auto service facility as their mostcritical post-relocation need. When combined with the fact that, on average, anestimated 80% of movers will likely try new products and services from localsuppliers within the first six months following a move, the importance ofdirectly addressing these potential customers becomes clear.
To capitalize on the businessopportunities new movers present, entrepreneurs must ‘strike while the iron ishot’ and entice new residents to try their products and services. The best wayto draw new customers to your business is to present them with an ‘irresistibleoffer’ for free service. I’m not talking about a coupon for 10% or 15% off yourstandard fare, but a letter written directly to the new resident, welcoming himto the community and presenting him with a gift certificate for a free service,such as an oil change.
The psychological impact of suchan offer goes a long way towards building a new, profitable customerrelationship. New residents almost always appreciate the courtesy of a welcomeletter directed specifically to them and will typically come in to redeem theirfree gift certificate. Once they visit your business, the hardest part ofcreating a new customer relationship is over. If they are impressed with yourbusiness, the friendliness of your staff and the service they receive, newcustomers will almost always return as repeat customers. That allows you tocombat the effects of customer erosion directly.
In addition, tracking thepercentage of sales your business receives as a direct result of new-mover giftcertificates is an ideal way to measure and evaluate the success of yournew-resident marketing programs.
Soon, you will realize that theinitial investment costs of establishing a new customer relationship – theprice of a gift certificate, an envelope, and a stamp – are nothing compared tothe revenues a satisfied repeat customer will bring to your business.
– By Jay Siff, CEO and founder ofMoving Targets and Loyal Rewards
