A Study in Getting More Customers

A business' customer base isn't static. Over time, that customer base will slowly decline. It doesn't matter if your business gives the world's greatest customer service, you will need to find new customers. Maybe some of your current customer base stops needing your product or they move to an area you don't serve or they pass away or whatever. This "customer attrition" will naturally occur. Often, it's unnoticeable, perhaps declining 5% to 10% per year. Over time, though, the results are catastrophic.

So getting new customers should be a primary concern, first to shore up your customer losses (however small they may be) and second to grow your business (assuming that you want to grow).

In acquiring new customers, there are marketing efforts which can create new "cold" customers who have never bought before and need a lot of convincing. But word of mouth is an ideal customer creation tool because it is highly trusted. If your customers can convince their friends to become customers, MOST of your marketing effort is done for you. Therefore, it pays to create a "salesforce" of customers and to empower them to tell their friends about your business.

One company that has built this right into their business model is Groupon.com, which I read about in a Harvard Business School blog recently. Groupon is a coupon site that helps businesses create those word of mouth customer acquisitions. 

Other coupon sites simply offer downloadable coupons to whomever is willing to click to the site (and perhaps sign up). There is no customer acquisition component. But there is with Groupon because their discount is only achieved when there are a minimum number of customers. For example, a substantial discount might be offered on a product or service within a specific urban area (they have 45 urban areas listed on their website) and the discount is only achieved if customers can convince a total of 50 people to sign up. This is a great idea in that it "pays" (by offering a discount) people to talk up the business to other people. 

The Harvard blog actually lists 4 reasons why Groupon is a great idea and this word of mouth customer acquisition factor is just one of the reasons. The other reasons are:

• "Interactions are super simple"

• "Create a sense of urgency"

• "Make it fun"

These four reasons are great secrets for any business to follow if they want to create an engaging customer experience… and especially an engaging experience that will also contribute to the growth of their business. 

Maybe Groupon's group coupon discount isn't right for you. But could the business model be augmented to suit your purposes?

Brought to you by: Contemporary VA - Run your business instead of running in circles.