Increase Your Customer Base
Loyalty programs, coupons and other ways to drive new traffic to your business
Q: I've been inbusiness for several years and have been able to maintain a steadystream of customers through word-of-mouth. However, I am interestedin increasing my customer base. How can I use marketing andadvertising to promote my business and draw in new customers?
A: If your businesshas decreased because of reasons outside your control (such as theeconomy), advertising alone may not remedy your situation. But ifyour in-store or Web site traffic has slowed down becauseprospective customers need more information about your products orneed an incentive to buy, you may want to promote your businessthrough several efficient and cost-effective methods.
Loyalty programs are one of the best ways to reward customersfor their patronage and acknowledge frequency. For example,Worldwide Gift & Loyalty in Oxnard, California, offers aprogram based on smart cards that enables small and midsizedbusinesses to issue and redeem electronic gift and loyalty cards,with programs tailored to an individual merchant's needs.Merchants can increase customer loyalty and build store traffic byoffering frequency points, points for purchases and rebates onpurchases, all of which can be implemented and tracked through theprogram. Here are some other ideas:
- Coupons generate traffic and reward a customer visit.
- On-hold phone messages educate and inform prospects andcustomers about your products and services while they wait to speakto a representative.
- Articles and press releases about your business submitted tomagazines, newspapers, business journals, chambers of commerce andso on can be great ways to broaden your exposure.
- Networking through leads groups, local chambers of commerce,Rotary clubs and so on help promote your business in your localcommunity.
- Event sponsorship can get your business's name in front ofyour local community and enhance your reputation as a concerned andcaring neighbor.
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- Promotional items (such as pens, pencils, coffee cups and mousepads) printed with your company logo can help customers andprospects remember who you are and what you offer.
- Free link exchanges with other Web sites bring visitors fromother Web sites to yours.
- Search engines can get your Web site at the top of a usersearch. Register with Google, AltaVista and other successful searchengines to place your business first.
Plan Your Campaign
If you employ these marketing efforts and determine that yourbusiness still needs the boost of paid advertising, considerthe following steps to plan your campaign:
- Clearly identify your target audience. Categorize yourcustomer database and prospects demographically; determine age,sex, marital status, profession, geographic region and so on. Whoare you trying to reach? Where are they? Why is your product orservice right for them?
- Define your message to reach your audience mosteffectively. Use your customer demographics to target yourmessage. Keep in mind that a "tastes great" messageappeals to one type of audience, while "less filling"strikes a chord with another. Focus your message.
- Calculate your advertising budget. Many companiesallocate 10 to 25 percent of their gross revenues for advertising,which includes ad design, production and media placement. Determinewhat you want to accomplish first, then set the right budget thatworks for your business.
- Select your best medium. Once you define your audience,create your message and calculate your budget, you need to selectthe right medium, which can include: print (newspapers, magazinesor the Yellow Pages), broadcast (radio and television), online(Internet, Web sites and search engines), direct mail (brochures,postcards or anything mailed to customers and prospects) andoutdoor (billboards and transit). Often, a combination of mediawill serve your purposes best.
- Measure your results. After you begin to advertise, youshould get a sense of its effectiveness. Does your in-store oronline traffic increase after your ads run? Do your customers bringin copies of your ads and request the merchandise pictured? Askyour customers where and how they heard about you. This will helpyou evaluate what you advertised, as well as the effectiveness ofyour messages, your media selections and your expenditures.
Once you decide you want to advertise, consider what media areavailable and how they can benefit your business:
- Online advertising includes banner ads, pay-per-click searchengines, as well as online classified and standard ads. Onlineadvertising is most effective when your ad appears on Internet Websites that are compatible with your products and services and reachthe same audience you want to reach.
- Newspapers, particularly local and regional publications withsmaller circulations, can be an affordable and effectiveadvertising medium. If you want to reach the largest audience,Sundays offer increased circulation, but that day will probablycost more. And if you sell a food or grocery product, you mightselect the day the paper publishes its food section.
- Yellow Pages advertising is particularly effective when aprospect in your community looks for a business in your category.Appearing in the Yellow Pages can put you top-of-mind with aprospect.
- Magazine advertising can provide a very targeted audience.Where newspapers provide general information, magazines can be morefocused. (Sports, fashion, electronics and the like all havededicated magazines.)
- Direct mail-brochures, postcards and mailers-can bevery effective if you target your audience and mail your brochuresor postcards frequently. Lists are available by demographics andgeographic locations from professional list brokers. If you open asmall retail establishment, you may want to send a mailer withdollars-off coupons to all households within a 2 mile radius ofyour store. You can easily measure the effectiveness of the mailerwhen customers come in to redeem their coupons.
- Radio lets your message reach a larger, more general audience.You might want to buy several radio spots and group them togetherto ensure that the listener retains your message and name. Radiostations can also help you produce a spot.
- TV reaches a larger audience than any other medium and isusually the most costly. For small businesses, network televisionadvertising can often be prohibitive. However, small businesses canreach a targeted market by advertising on local cablechannels. Just remember that repetition is the key. You wantyour TV spot to run at least five to seven times, but preferablymore. And since producing a TV spot can be very expensive, cablesystems usually have production capabilities and can offer smallbusinesses the advantage of a professionally produced spot at anaffordable cost.
Promoting your business is not just about advertising. Marketingthe right product at the right price to the right market segment atthe right time, in addition to public relations, are both importantelements to your overall business mix. Conduct your advertisingresearch first and then set a realistic budget. Make certain yourmedia choices reach your target markets, meet your businessobjectives and fit your budget. Get the message to your customersthat you have products and services that will meet their needs.Communicate that you want their business. The most effectivemethods and media depend upon your products, your target customersand your creativity.
Cardservice International Senior Vice President ofSales John Burtzloff is in charge of sales strategy andexecution and thus is responsible for managing all aspects of thecompany's marketing, communications, telesales, checkguarantee, new accounts and sales support activities.
The opinions expressed in this column arethose of the author, not of Entrepreneur.com. All answers areintended to be general in nature, without regard to specificgeographical areas or circumstances, and should only be relied uponafter consulting an appropriate expert, such as an attorney oraccountant.