Building Customer Relationships: 9 Common Mistakes to AvoidJune 12, 2013 11:00 am
Building customer relationships and managing the communication with your clients over time is one of the pillars of any successful business. Mastering this art will provide your store, your restaurant, your hotel or any other kind of business a steady and healthy income throughout the years.
In fact, as I previously stated in this article, it is 6 to 7 times cheaper to maintain a current customer rather than acquire a new one.
Some companies out there are mastering the art of CRM, and their results speak for themselves. The supermarket giant Tesco has one of the best CRM strategies in the retail world, it started as early as 1995 with the introduction of the Clubcard.
The Tesco loyalty card gives their customers the ability to avail of coupons and vouchers closely related to their interests and lifestyle, based on their previous purchases.
What’s also interesting about the Tesco strategy, is that they noticed that not all of their clients are equally as valuable to them. In fact, the top 5% of their customers are responsible for 20% of their overall turnover.
By measuring their efforts depending on the kind of customers they were dealing with, Tesco not only managed to gain market share in the UK, but also worldwide.
The good thing is that you don’t have to be a giant retailer to become a CRM Jedi.
Many small businesses perform very well on this particular matter.
However, we, at Text Republic, are regularly dealing with businesses struggling with their CRM strategy: with no particular methodology in place, a business can lose an extraordinary amount of revenue.
The following list contains 9 warning signs that you are one of the businesses who are losing money due to poor customer relationship management.
Warning Sign #1 : Your CRM tool is too complicated
If you are a small business owner, such as a restaurant owner or the manager of an independent clothing retail store, and don’t completely understand how your CRM tool is working, you have a big issue.
For a business counting between 500 to 2000 loyal customers,an advanced CRM tool is no use at all if you don’t completely master it.
Some good advice would be to use the most simple database management tool out there for building customer relationships – Microsoft Excel.
Create columns for each of your customer’s name, mobile number, email address and a column to add specific notes on each customer. At the start, this will probably be all the information that you need. With these simple pieces of information you can send your customers offers and updates via SMS and email while also recording any relevant pieces of information specific to a customer. Examples of this might be what they last bought from you, notes from your last conversation with them or their birthday. Basically anything that can help you give them a better and more personable service.
However, if you want to invest a small amount of money for a reliable and simple online tool, HighRise is the one for you and will help you building customer relationships.
Warning Sign #2 : You Customer Data is Old
If the latest transaction recorded in your CRM tool is from January 2008, you might have a huge problem.
Keeping your database up to date is a crucial element of your CRM strategy.
If you don’t refresh your database on a regular basis, you will miss the opportunity to contact the majority of your customers because of inaccurate information.
Chances are that your competitors will then win some of your market share due to the fact that they have been able to provide a better customer service than you.
Warning Sign #3 : You don’t systematically ask your customers to interact with your brand
Every single interaction with your customer is an opportunity for you to ask if they want to be part of your loyalty program, if they want to enter into one of your competitions or if they want to like your Facebook page.
Don’t assume that your customers will magically login to their Facebook account, search patiently for your business name, and then become a fan for no particular reason.
Train your staff members to systematically drive your customers to action.
Warning Sign #4 : You don’t have any special offers in place
Asking for your customers to like your Facebook Page is a good thing. Giving them a reason to do so is much better.
Run regular competitions to encourage your customers to subscribe to your newsletter, like you on Facebook, follow you on twitter or sign up to your business text messaging service.
Ask them for their opinions about the quality of your customer service while paying particular attention to your most unhappy customers).
You should also ask your most happiest customers to write a review for you on TripAdvisor – especially if you are running a hotel or restaurant.
Warning Sign #5 : You don’t offer a way to opt-in by text
This is particularly true for businesses such as restaurants, hotels, convenience stores or pizza parlours: one of the greatest ways to build a customer database is to use an SMS shortcode.
How does it work?
- First, you set up a shortcode such as 50050 with a text marketing company.
- Second, you promote this shortcode everywhere in your business: your website, your social media accounts, on wall posters, shopping bags, flyers, receipts, etc…
- Third, you give your customers a reason to send a text to 50050. It could be to sign up to your customer loyalty program to receive exclusive offers or to give you direct and discreet feedback.
Warning Sign #6 : You don’t provide your customers with a way to unsubscribe
The line between promotional messages from your brand and spammy advertisements is sometimes very, very thin.
Therefore it is vital to include a free and easy way to unsubscribe from your newsletters, email campaigns and marketing texts.
Always include the following text in your marketing text messages (or equivalent) : “To unsubscribe text STOP to 50500”.
By law, your marketing messages should ALWAYS include an easy and free way for any of your contacts to stop receiving them. If you don’t include it, you run the risk of frustrating your customers, seriously harming your reputation and running foul of the data protection commissioner.
Warning Sign #7 : You don’t ask for your clients’ permission
In you’ve been in business long enough, you’ve probably been approached by several obscure companies asking you to purchase a list of prospects.
These kind of businesses will always tell you that their lists are genuine, that you will get great value for your money, and of course, that the potential customers in this list have agreed to be contacted by a third-party. Seems to good to be true right?
Well, 9 times out of 10, it is too good to be true. Not only will the data turn out to be very unreliable and out of date, it is also against the law.
The most important aspect however, is that it’s not fit for purpose. It’s akin to throwing a 45-year old, 1 meter-square, damaged net into the Pacific Ocean in the hope of catching 50 blue whales.
Go back to the basics and contact the people who really want to hear from you.
Warning Sign #8 : You don’t segment your customer database
At Text Republic, we strongly believe that customer segmentation contributes to a higher conversion rate, no matter what your marketing message is.
If you know for a fact that some of your products or services only suit one type of customer, you should then segment your database to identify this particular kind of customer. One size will never fit all.
If you’re using Microsoft Excel for your CRM, then add an extra column to tag your customers per category.
Warning Sign #9 : You don’t have a database
Well, the title says it all really.
Even if you’re technophobic and can’t approach a computer without feeling sick, not having a customer database is a huge mistake.
There is no excuse: there are many simple tools that can be used to start a very basic database. As discussed Excel is a great database tool for beginners as well as the many resources available online for managing more complex customer databases.
Alternatively, there are multiple CRM companies that will help you with building customer relationships. The investment will be worth it as your marketing messages will become far more effective.
To summarise, whether you own an Italian restaurant, a pharmacy, a small butcher’s chain or a convenience store – customer data collection should be an important part of your marketing strategy.
Building customer relationships over time is a guarantee of a steady flow of customers and also a great way to stay up-to-date regarding your clients’ needs.
Image references: Featured image and Yes!,
Categorised in: Grow Your Business