Don’t Get Sequestered: Protect What You Have
Part 1 – A Business Survival Guide
What is Sequestration? Is it what the vet does to Fido? Do men say, “Geez, I came home so late last night, I thought my wife was going to sequester me.” For some, Sequestration is going to feel just like that procedure. For others it is an opportunity. Yes, I said that, and not just an opportunity to throttle the nearest politician. Sequestration brings the kind of multi-directional pressure that will crush weak companies but leave the strongest (and smartest) not only still standing but often bigger than ever. It will make you fight to protect your customer base, fight harder to grow it and bedevil staff retention. All that while squeezing cash flow, payroll and advertising budgets. However, if you have an effective strategy to deal with these pressures, you will not only survive but be in a position to absorb market share from those who don’t. In this and following articles, we’ll discuss methods to make a stressed marketing budget more effective and Sequester-proof your business.
Step 1. Protect what you have. We’re not talking about iron underwear here. But keeping customers in an economy under stress is no easy task either. In a normal economy, approximately 10 percent of a company’s customers are considering going elsewhere. In a stressed economy that number tends to go up as customers shop for better value. Note: Value is not necessarily price. Buyers more often do business with companies they trust and that make them feel appreciated than with the one with lowest price. There are many inexpensive tactics to promote customer loyalty and trust. You can institute a program of discounts/rewards for customer longevity or return visits. You can survey your customer base and see what they think of your product or service so that improvements can be made. You can buy radio time and print space (as I do in this newspaper). My personal favorite (for obvious reasons) is to promote loyalty and trust through promotional gifts. A useful item with your company name and message on it is like a permanent ad repeating your logo and message day after day. Research shows that customers who are given promotional gifts have a higher impression of the company who gave it (Trust!), are more inclined to buy from that business and more likely to refer a friend. All of that can be obtained from one small gift which can cost less than a buck.
There are an infinite number of ways to bring gifts into your transactions. One is Gift with Purchase. Purportedly invented by Estee Lauder and is as the name says, rewarding a customer’s purchase with a small gift. I like this one because it can be a sales driver (If the gift is of high enough value, it can be advertised to bring new customers in the door) as well as a loyalty enhancement. The value of the promo gift should somewhat mirror the value of your product. The higher the price-point of your product, the higher the value of the gift. So if you are selling cars, you could give a $20 picnic set. If you are selling fast food, you could give a .25 cent collectable cup. The possibilities are endless but you get the idea. None of those items would significantly reduce margin on the sale but will begin a chain reaction of goodwill, referral, purchase and goodwill again.
If your company serves customers through sales professionals or service technicians, whether in the home or office, an imprinted leave-behind tool or other useful item can work well for you. A plumber or electrician can leave a magnetic flashlight on the refrigerator. A lawn maintenance tech can leave a rain gauge on the lawn. The average charge for any of those services is near a hundred dollars yet the gifts only cost around a buck or two. If the item is seen just once or twice per week over the course of a year, the cost per exposure f your logo is a penny or two. That’s efficiency!
Right now, your competition is brain-storming ways to take away your customers. What are you doing to protect them? There are many more methods to promote customer loyalty on a budget than I have space here to write, however, the important thing is to pick one that fits your budget and get going!
In my next installment, we’ll be discussing ways to attract new customers.
For research data on the effectiveness of promotional products in enhancing customer loyalty, go to www.uslogoworks.com/research.