Looking after your customers online

iPhoneOkay, so you're up and running online, you've got customers visiting you and hopefully some sales, bookings or sign-ups off the back of those visits – what now?

Now you need to start thinking about your Customer's Lifetime Value (CLV). If you can get over its, it's an extremely importance factor when it comes to building your database and turning your customers from one-hit wonders into loyal repeat buyers. Increasing their CLV, i.e. encouraging customer loyalty and repeat purchase, is a fantastic way of growing your business.

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Keeping an eye on CLVs

The best way to keep an eye on this is to build a customer database. It should include a record of each person who comes into contact with your business, the nature of the contact, when it was, and any other data you may have. 
 

If you take e-commerce as an example, this might be:

  • Customer's name
  • Any contact details you have
  • Dates of their purchases
  • The products they chose
  • Any other personal details you have, i.e., date of birth, preferences, etc


It might sound simple, but keeping a record like this can be the first step to creating something you can really analyse and get some useful data from.
 

Using customer databases effectively

Next, you need to use that data. Andy Farmer, Head of Customer Experience at Weapon7, recommends using three key markers for people.

The building blocks of customer segmentation are:

  1. Recency
  2. Frequency
  3. Monetary value

If you know these things about your customer base, you can start to work out who your most valuable customers are, and who you need to work harder on.

From there, you can start to shape a plan for how to contact your customers, what messages you send and how you can choose the right communication for each group.

 

Offers and incentives 

Offers and incentives can be a really powerful tool for switching customers on, but there are different ways to approach them. Once you have grouped your customers, you can pick the right offer for them: 

Customers with the highest value and most recent purchase: your devotees
To encourage future loyalty:
You're one of our top ten customers! As a big thank you, we're taking 10% off your next purchase


Customers with the least recent purchase: your drifters
To 'reactivate' this group:
Have we told you lately that we love you? We miss you, come back with this 10% discount on your next purchase


Customers with lower values: Your Cheap n’ Cheerfuls
To 'upsell' this group:
Just for you! Get 10% off purchases over £50

The eagle-eyed will notice that this is pretty much the same offer spun three ways, which means you can work out a discount that your margins can support, and deliver it to each customer group that feels exclusive to them. Although, Andy says: "Use your common sense when it comes to offers – if you rely on them and send them out too often, your customers could start waiting for them before they are willing to purchase."

 

Thought-leadership

If your business relies more on your expertise than your ability to shift stock, then pushing up your value as an authority can really help drive customer loyalty. Set yourself up as a 'thought-leader,' and you put yourself firmly in the front of your customers' minds, and when they are in need of expertise, your door will be the one they knock on. This approach does mean committing to staying at the forefront of your field, which means it's ideal for service-led businesses, such as accountancy or legal consultancy, as you already have an obligation to stay on top of your industry.

Top tips for establishing yourself as a thought-leader

  • Contact your customers with timely, informed and considered responses to changes or developments in your industry
  • Suggest resources and other experts to align yourself with other industry leaders
  • Link communication to services or products that you offer
     

This is a great way of staying in touch with your customers if they are unlikely to need your product or service on a regular basis. And as Andy explains: "Communication like this gives your customers a reminder of the value of what you do."

 

Make it personal

There's no getting away from it, people like the personal touch. Take a look at the data you hold about your customers and see how you can use it to show that you know and value them. Do you have their date of birth? Could you offer them a birthday discount? Have they bought the same style or type of thing or made enquiries of a particular nature more than once? Could you suggest similar choices to them? Of course, this can only be achieved if you are diligent about cataloguing all your contact with customers.

If you don't have very specific details then go for more generic hooks, like Christmas, back to school, or the financial year end. Andy suggests that you use the analysis of your customer database to work out which of your customers has 'lapsed', meaning they haven't made contact for a while, and send them a 'trigger'. He adds: "Triggers can be seasonal, personal, even national, but they spark a connection between your customer and your business, above and beyond their regular motivation to act."

 

How to reach them

Make sure your messages are as clear and engaging as possible and use attention-grabbing language, but ensure it is on brand for your business. Once you've decided what you want to say, there are different options available to you, depending on what information you hold about your customers and what permission you have gained to contact them.

Andy explains: "Email is still a staple of online marketing and customer communications, but people are getting more and more used to it, so creating cut-through with really strong ideas is paramount. If you hold people's mobile numbers, SMS can be a disruptive – in a good way – method to keep in touch."
Of course, if you're a local business or the majority of your customers are in one place, you can look to take your online database offline and organise events."

However you decide to get in touch with your customers, the building blocks remain the same. Andy sums it up: "Make a note of everything you know about your customers, build your database, analyse it and look for patterns. From there, you will have what you need if you have the time to commit to it to do something that can be of real use to your business."

If you've missed out on any of the expert tips and advice brought together in the Online Business Fortnight you can take a look back over them now, or download a full roundup, with added extras very soon!

Head to Barclays on Mumsnet for lots more:

 

 

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Last updated: 29-Jan-2014 at 11:10 AM