From the December 1997 issue of Startups

Customers are the most important ingredient in any entrepreneur's recipe for success. First, they provide much-needed revenue in the early days of your new business. Then, if you've done your job right, they go on to become satisfied, repeat customers who spread the good word about your business to others--generating referrals and more business for you.

Finding and keeping customers is one of the most essential aspects of running a new business. Initially, your goal is to let potential customers know that you and your business exist. Once they've had the opportunity to try your product or service, you'll want to do everything in your power to keep them coming back.

To successfully find customers, stress your venture's Unique Selling Proposition (USP) as frequently and clearly as possible. This is a carefully worded statement of the important aspects that set your business apart from your competition. Rather than focusing exclusively on features, point out how your new product or service will benefit your customers. Features are selling points about your product or service; benefits are more specific ways that your product or service will enhance your customers' lives. The answers to the following questions will be benefits: How will it save them time or money? How will it make their lives more efficient or enjoyable? How will it solve their problems or fill their needs? How will it be superior to similar offerings from your competitors?

Get the word out about your USP to generate first-time sales by using a combination of tried-and-true methods: fliers posted on bulletin boards in your community; direct-mail letters and brochures; advertisements in the local newspaper; and ads in the Yellow Pages. Persuade established businesses in your area to distribute literature about your business, or to make it available on their counters. Send press releases to local media outlets. Let relatives, friends and co-workers know about your business.

After your first sale, do whatever you can to keep your customers coming back for more. Publish a newsletter to keep them informed of developments in your business and to maintain an ongoing, personal connection. Request feedback to remind them of your dedication to providing a top-quality product or service, and improve your offerings when necessary. Send customers thank-you, birthday or holiday cards to let them know you appreciate their support. Exceed their expectations by providing just a bit more than they anticipate--a customer-appreciation discount, an extra service at no charge--to keep them satisfied and ensure referrals.

Finding and keeping customers involves strategic planning, aggressive thinking, and bold, innovative approaches. It also involves consistency in the quality of your offerings and a commitment to meeting--and even exceeding--consumer wants and needs. Because different types of businesses require somewhat different approaches, our Building Blocks entrepreneurs have returned to discuss the methods they've used to generate and retain customers of their own.


A business writer for the past eight years, Kylo-Patrick Hart has run a successful homebased consulting business since 1989.

Al Schneider, usedmall.com

Al Schneider, 58, and his business partner, Harvey Berlent, had a good deal of professional experience in the technology industry and were running another computer-related business when they started usedmall.com. So when it came time to find customers for their new Internet-based, electronic classified-listings service in March 1996, they knew just where to look.

"We already had existing relationships with our customer base, so we contacted potential customers we knew and invited them to try the site. They responded by putting up ads for their products and services," Schneider says. The primary emphasis of the site is business-to-business classified ads pertaining to the buying and selling of used and surplus equipment. To ensure that a good number of items were available for sale on the site early on, Schneider and Berlent offered many of their contacts the opportunity to run a free ad for 30 days. This gave their site an established feel right off the bat and showed potential customers that their idea would work. That generated repeat customers--several people who placed free ads have since become paying customers.

Schneider and Berlent constantly stressed the USP of their business in order to find and keep customers. In contrast to classified advertisements placed in traditional media, which are typically seen by a limited number of people in a limited distribution area, ads placed on usedmall.com can be viewed by millions of Internet readers worldwide. As their site has grown, the partners have found new ways to communicate this USP to others. They have listed their service on nearly 100 search engines and they've arranged mutual hot links with other Web sites that attract a similar clientele.

Still, Schneider and Berlent have never forgotten to keep in touch with the customers who've helped make their venture a success. "We occasionally send them press releases and other correspondence. We have face-to-face conversations and make personal phone calls to update them about developments with the site," Schneider says, "and to let them know we appreciate their business."

Suzanne George, Suzanne George Shoes

"It's not my nature to be a salesperson, so I've been lucky that most of my clients have found me through referrals or my business listings in the phone book," says Suzanne George, 34, who launched a San Francisco shoemaking business in the summer of 1995. George's footwear is unique because she creates the shoes by hand--one pair at a time--to meet the specifications and special sizing requirements of her clients.

When George went into business for herself, she informed relatives, friends, and co-workers about her business, and they spread the word to others. Most of her clients--people who have difficulty finding mass-produced shoes that fit well--have been thrilled with her made-to-measure footwear. This is good news for George, because such clients tend to become repeat customers. "When you spend a lot of time on that first pair--making sure the fit is just right--most people who make that first investment become interested in ordering again," she says.

George believes listing her business in the telephone book has been instrumental in generating first-time customers. "When I got my business line installed, I got free listings in the white pages and the Yellow Pages, and I regularly get calls from those. They come from people who have really serious fitting concerns and those who just want to find out more about what I do," she explains. She's been a bit surprised by the volume of calls resulting from those listings, especially because they're business-name-only listings without additional details.

To date, George has not placed any paid advertisements to promote her business, but she is exploring new, inexpensive ways to get the word out about her business. "I've been trying to align my business with others that have customers who are in my target population. I make it a challenge once a week to visit a business that I think would be a good match--to set up a formal or informal kind of relationship," she says.

Nevertheless, George realizes that past customers provide the key to her business's future. "Because I don't have a big volume, the repeat work is really important," she says. "To remind my customers that I'm here and that I care, I often check back with them--give them a call or drop them a note--just to see how things are going. I'm always trying to figure out news ways to keep in touch with them."

D.J. Waldow, B-School Cleaners

Early this year, D.J. Waldow, 21, and his partner, Matt Campbell, opened a dry-cleaning service in the University of Michigan Business School. Starting on a shoestring budget, they did everything they could think of--that didn't cost much money--to generate customers.

"We did a lot of stuff in the beginning to promote the business, such as sending e-mail messages to every student in the business school and posting fliers around the building," Waldow says. "Each business-school student has a mail folder, so we inserted fliers into all of those. We hung a huge sign in the window of our location, announcing our grand-opening date. We placed an ad in the business school's weekly newspaper, and we convinced the staff of the paper to write an article about our business that ran on the front page. The rest of our early publicity was accomplished through word-of-mouth, by Matt and I getting the word out to everyone we knew and asking them to tell others."

During their first year of operation, Waldow and Campbell's goal has been to build their customer base almost exclusively within the business school. Their USP? The convenience of their location, coupled with dry-cleaning prices that are competitive with those being charged around the city. "Most of our customers so far have been MBA students, who constantly need clean shirts and suits for interviews. They can easily drop off their clothes on the way to class," Waldow explains. In the coming months, however, the partners intend to expand their promotional activities into nearby buildings on campus--including the law school and a few sororities--to recruit new customers.

Waldow and Campbell understand the importance of maintaining ongoing contact with customers. In addition to asking for each customer's name and telephone number, they always ask for an e-mail address, because all students on campus have free e-mail accounts. At the end of each week, Waldow sends a brief e-mail message to every customer who has ever visited the business. "Some weeks it's just to remind them of our hours and encourage them to stop by; other weeks it's to ask for feedback about our service. Doing this serves a dual purpose--it reminds them that we're open, and it gives them a chance to comment on anything they consider to be working well or in need of improvement," he says.

The quality service and continued contact doesn't stop there. "Another thing I strive to do after someone has been in a time or two is to remember their name. For example, there was one MBA student who came in every Monday and always brought in three or four shirts. As soon as I saw him coming in the door, I'd start writing his name and telephone number at the top of an invoice," Waldow says. "It definitely made an impression. I think personal touches like that help bring customers back. It feels good when others remember you."

10 Ways to Keep Your New Customers

1. Continually stress the benefits of your product or service rather than the features.

2. Exceed your customers' expectations.

3. Point out the total value of your products by emphasizing their quality, convenience and problem-solving aspects rather than focusing solely on price.

4. Send your customers thank-you notes to express your appreciation.

5. Ask customers for feedback, then use it to improve your business.

6. Express your gratitude to customers who provide you with referrals.

7. Strive to greet customers by name and to remember important information about them.

8. Keep in touch with customers.

9. Remember your customers at holidays and on their birthdays.

10. Treat your customers the way you enjoy being treated yourself.

Contact Sources

B-School Cleaners, djwaldow@umich.edu

Suzanne George Shoes, 526 Seventh Ave., #3, San Francisco, CA 94118, (415) 775-1775

usedmall.com LLC, (800) 683-1608, fax: (201) 871-4002, http://www.usedmall.com , info@usedmall.com