Growing the business in 2013:Time to review the fundamentals?

This is typical of the season as we all want to get off to a fresh start. However, such initiatives are more important than ever in the current climate, as businesses look to put the last couple of years of sluggish performance behind them.

So, what are the keys to making this happen? It hardly needs saying that all businesses need a good and solid pool of customers and prospects. An absence of customers means no revenues and, therefore, no business. The challenge for businesses is understanding exactly what ‘good’ means in this context however. It is not simply the customers with (what appear to be) the biggest pockets or the deals that close most quickly that will guarantee long-term success.

Good customer relationship strategy is based on tried and tested principles – indeed, back in the 1940s, authors like Frank Bettger were documenting the lessons they had learned in how to build stronger relations with customers and prospects. Today we use terms like relationship marketing to capture the essence of best practice in how we engage with customers and prospects. The key is that, for good business, companies of all sizes need to be developing strong customer relationships rather than simply enabling transactions to take place.

Whether in retail, construction, healthcare or finance, the tenet that “people buy from people” remains fundamental, particularly in the smaller business sector. What’s more, this principle even takes into account the increasingly technology-driven environments within which we work. Successful use of mobile devices and apps, social networking or websites depends on making such tools the enablers of good customer relationships.

Relationship marketing is not simply about being nice to people in the hope they might buy something, however. Rather, it means putting the individual at the forefront of all stages of the marketing and sales process. We often hear phrases like “putting the customer first” and “the customer is always right”, but these don’t really capture the central point of ensuring customer needs are front of mind from the outset, delivering products and services that fulfil and work alongside customers to make sure they are satisfied.

This customer-centric attitude doesn’t stop once delivery is complete or the receipt is issued of course. Customer retention is ensuring existing and previous customers will want to come back, which is dependent on how they feel they were treated last time round. Equally, a very positive customer base can wither on the vine if it is not nurtured, kept informed and continuously shown to be valued in some way. Otherwise, being fickle by nature, customers will turn to other suppliers and brands that they feel value them better.

A starting point is, of course, to keep reasonable records about existing customers. Most organisations will be using a database or CRM system which holds information about past purchase orders, invoices and so on, but how many are actively using this as a tool for keeping close ongoing relations with their customers? Even traditionally transactional sales models, such as retail and hospitality, can benefit from building up a core email list of repeat customers – a book shop could hold a reading morning, for example, or a restaurant could run a themed evening. Each satisfied customer may be a conduit to several referrals, if treated right and incentivised to do so.

It can be all too easy to be distracted by new business opportunities originating from new customers, and to ignore the potential within the existing customer base. However, given that it is generally easier (and therefore less costly) to keep a customer than to find a new customer, it makes sense to invest in customer retention as much as in other areas of marketing. This brings things full circle, as relationship marketing applies to the existing customer base just as much as to new business prospects.

While relationship marketing does require more effort beyond simply touting for sales, it does not have to be a drudge. Indeed, the existing customer base can be seen as a genuine goldmine of potential, offering a far greater bang per buck than trawling for new leads all the time – as long as it is collated, managed and nurtured in the right way. Indeed, while lots of companies are asking questions about where business is going to come from in the New Year, many may find that they have been staring at the answer all along.