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Q. What Is Demographics?
A. How to get more customers into my business is a recurring question faced by many businesses throughout their trading lifetime. It doesn’t matter how large, or small, your business is, the issue faced is the same one. The central question asked though – how do I get more customers – is actually the wrong one!
Q. How Can I Get More Good Customers Into My Business?
A. How to get more good customers is the right question. Every business has had issues with poor customers. Either they don’t pay their bills or they complain or they are expensive to service. These are the types of customer that you do not want more of and some companies have policies to ensure that they dissuade some of their more costly customers from returning.
Q. How to Attract the Right Type of Customer Into Your Business?
A. First of all you need to define who the right type of customer is. Many years ago Richard Koch created the 80:20 rule. This rule can be applied to almost everything. In business 80% of revenue tends to come from 20% of customers, 80% of sales come from 20% of stock held, 80% of profit comes from 20% of transactions. You get the idea. This law can be taken further and the top 20% can be further analysed as it is highly likely that 80% of revenue in that group also comes from 20% of the customers. Yes, the implication of this is that some very good customers are supporting your business. So when you ask the question, ‘how can I get more customers’, you really mean how can you find more customers like this very top group.
Q. What Tools Will Help Me Find More of the Right Type of Customers?
A. Customer profiling by demographics is a great tool to use to find more of your best types of customer. Your product or service will appeal most to people who have a need for it and the ability to buy it. So if you know who is most likely to want it and is able to pay for it, you’e making progress. To identify where more such consumers are, you need to identify the characteristics of your current best customers and then seek out more people who match those characteristics. There are many ways to do this. The simplest is to run a customer database through a demographic profiling system to identify who the best types of customer are. Then a review of your market area using the same system will show you where more of these best types of prospects live. The information provided will enable you to consider how best to contact them.
The tools you can use to attract customers to your business are many and varied. How different types of business may attract more customers also varies. For this reason we briefly describe the different methods below and then later look at how different types of business may use those that are the most appropriate for them.
Q. What Promotional Methods Will Help Me to Get More Customers?
A. In my opinion, all of your promotional activity should be targeted at either getting more enquiries or direct sales. Most small businesses gain little by seeking to ‘build a brand’. Generating sales or enquiries gives you a way to measure the effectiveness of your marketing spend. Brand building is fuzzy and how can you measure it?
The main promotional methods to consider are:
Appearance: not everyone’s first choice but so important for the customer. A poor external appearance may dissuade customers from visiting you. Whatever your bricks and mortar business may be, it is important that the exterior is clean, well maintained and well lit. External signage should be consistent in style, up to date and well presented. Any car parks or frontage should be well swept and well presented.
External signage: must be uncluttered and clearly written. If it is intended to attract passing motorists, is it easily read, are the colours clear and is it well lit at night? For pedestrians a moving sign may be more eye catching than a static one.
Advertising: there are so many opportunities that only general issues can be covered here. To stick to simple principles: the medium (local press, local shop ad board, magazine) must be appropriate for the market you are seeking to attract. Small regular adverts may be more effective than one off ads. Using an image? Then put the headline above the image and ensure you use a caption below. Make sure your headline and caption sell benefits and not features. The types of springs provided in a bed are features, the comfortable night’s sleep they provide is a benefit. Remember that your business name is not a headline. There are no benefits in that – except to you! Final thought – can you negotiate better rates by buying ‘distressed’ space – space that remains available just before the publication goes to print? If in doubt about a media, call someone who has advertised on it before and ask them whether they found the results encouraging. Make sure that your advertisements are well worded with a very clear call to action.
Direct Mail: Yes it does still work! Make sure your list is an appropriate one – it can be tested using demographics to profile the people on your list! Your mailing must have a compelling offer and you need to be clear what you trying to achieve when you write the letter. Are you trying to get enquiries or sell directly off the mailing? If you are selling a high priced item then it is likely that you are trying to get enquiries or leads. Few people will buy an expensive item without more information. Test the costs on the basis that you will get a 1% to 2% response. Will the mailing be profitable as a one off? Do you know what your customer lifetime value is? Your mailing piece must have a call to action and a closing date. The target date is there to urge early action and to prevent your letter being put to one side ‘for later’!
Door drops: yes these still work too. Once again you need an attractive offer, the item needs to be attractive, the call to action needs to be clear and compelling. Consider whether you want a solus distribution (your item alone) or be one of several items. The response rate will be low, probably well below 1%, subject to the strength of your offer, but the costs will be low too.
Radio ads: What are you selling? Is there a time when your key audience will be listening? Once again demographics are important – is there a match between your customer and the radio station’s listeners? Advert needs to be catchy with easy to follow instructions. Once again consider what are you trying to achieve from the ad – is it sales or enquiries?
Tele-sales: Unless you are confident on a phone, consider the use of an agency or an employee who can handle rejection and bounce back! You will need to develop a script and don’t forget to comply with the TPS – the telephone preference service.
Other sales tools now include: text messaging which can be effective for short term promotions and contact with past customers, Google adwords promotion – but learn what to do before committing much money as it is easy to get carried away, Facebook advertising, online banner advertising. In addition there may also be industry magazines and directories you can use.
One further thought regarding Google Adwords: whilst adwords can be a very useful tool in its own right it is also a great way to discover which sales messages will work for you. If you run a google adwords campaign for say 48 hours and use different ads, you can measure the response and find out what works for your business with your customers. It’s a great way to test the market!
Finally one other way to get more customers is to offer incentives to your existing customers when they recommend your business to their friends; provide their friends with discount vouchers or even to reward your customers when their friends use your business.
In short, there are many ways to get more customers. It may take some creativity but good offers taking account of the benefits you provide to your customers, will generally work best. That’s why it’s essential to understand who your customers are and why they buy from you.
Having summarized some of the ways in which a business can find more customers, specific ideas for different types of business follow.
Q. How Can I Get More Customers to a Restaurant?
A. External presentation, clear signage and a clean and attractive site are essential to a food business. As always you need to understand who your customer is by identifying their demographics – general age, family groups present – is it mainly couples, or groups, celebrations or family diners? Why do they visit you: celebrations, save the need to cook, limited time, late evening workers, is your business located on an evening circuit, by a theatre or cinema. Do you offer fine dining? As ever the answer to finding more customers is dependent on who they are!
Once you identify who your best customers are, consider profiling your catchment area to identify where more such people live and then decide how to contact them; door drops, local area advertising or partnerships with other businesses are just some ways.
What promotional methods work for a restaurant? Running joint promotions with other businesses in the area, especially visitor attractions, cinemas and theatres, but depending on your trade, maybe also hospitals, boarding schools and maybe even local companies. Are there any self catering businesses close by you can piggy back on, or lodges with no catering facilities? Is there a reason people visit your area – walkers, cyclists etc? If so can you advertise where they will see the ad and is there a service you can provide – such as a safe bike lock up – that will encourage them to dine with you.
Local advertising, Facebook campaigns, user get user campaigns are other possibilities. Maybe local PR is a way to go, remember that the local press are always looking to local interest stories – can you help them by writing a menu column, or sharing some of the celebrations you host? Can you even run a press offer that will promote the local paper as well as your business. In addition to the local press, there are now hyper-local web sites and local area advertising magazines. Is there a way that you can generate interest for these media outlets – and add to your customer numbers at the same time?
Finally is it appropriate to offer a loyalty card or one free meal for every five or six taken? If someone books for December can you offer them a cheaper meal in January when it will be quiet? Special events such as food festivals or Christmas in July are other ways to attract customers by creating interest.
Q. How Can I get More Guests to My Hotel?
A. Many of the ideas given above for the restaurant work equally well for a hotel, especially contacting local businesses and attractions – businesses that draw people to an area. In addition you could try: training your receptionists extremely well so that they ask guests why they are visiting the area. This question may uncover a meeting, event or exhibition you know nothing about and which will generate more room bookings for you when you follow it up. The interesting thing about marketing an hotel is that very few people visit you because of your business. You are generally reliant on people wishing to visit the area for other reasons: business or leisure. It is not because they have a burning desire to stay with you! So discover those reasons and you will be on the way to finding more customers.
One method we have used in the past for a business hotel, was to get a list of the companies that used them and profiled it against SIC (Standard Industry Classification) Code. Every company is tagged with a SICC code. If you find out which types of companies tend to send you business, it may give you ideas of how to find more.
One very cheap idea not used often enough is external signage. A simple ‘Rooms Tonight’ sign, well lit on a dark road, can work wonders. It does depend on you or your staff keeping it updated but the additional revenue will make that worthwhile.
Obviously the internet is a key marketing tool these days. You will no doubt need to join some of the various online agencies, but do not rely on them too much. Before they were available, travel agents used to charge commissions of 8%, 10% or 12% to sell a room. The current level of commission is far too high and you need to get a balance of trade to minimise these charges.
One tip I’ve seen work well for a tourist hotel, was to track not when people visited, but when they booked! If you know when a customer is likely to be thinking about booking, then you know when to sell to them to ensure they don’t go elsewhere!
Q. How Can I get More Members to My Gym or Health and Fitness Club?
A. Gyms and health and fitness clubs have a distinct advantage over many other businesses. They normally have a membership database including the post codes of their members. This means that they can get a demographic profile of their members and then run a similar demographic profile of people living in their catchment area. By comparing the two, it is possible to identify where to target for new members. The results of the profile should also indicate which types of promotional activity are likely to be the most effective.
Door to door leafletting is one obvious way to promote the club, but others include forming partnerships with the owners of businesses that target similar types of people. Member get member schemes also work well and of course local companies can be approached for corporate membership. Could local doctors’ surgeries/ hospitals be other sources of members too? Is there a way that you can help their patients? Given the obvious link between gyms, health and food are there opportunities to work with businesses in those industries too – such as diet clubs?
A look at the demographics of your membership and when they use your club will also indicate other opportunities. Maybe mid mornings are quiet, so can you start a mother with toddler service?
At one club we discovered that by starting earlier in the morning we were able to attract more business people who wanted to exercise before work – and others who finished later in the day wanted evening sessions. As always think about who your customers are, their needs and how you can serve them better.
Q. How Can I Get More Customers in My Retail Shop or Store?
A. The most famous quote in retailing is ‘retail is detail’ and that is correct. It demands that you fully understand the needs of your customer. Who are they are why do they shop with you? What service or product are you offering that attracts them and why do they choose to buy from you? This brings us back to demographics and fully understanding your customer.
In general there are three reasons why we choose to shop where we do: price, quality of product and the level of service offered.
Most retailers cannot afford to compete on price. You can try but it is a battle you will lose in the end. This means that your main tools are the quality of service you offer and the quality of the product you provide.
Loyalty schemes may have lost some of their attraction but a card scheme of some sort offers the benefit of knowing your customers address and postcode. This provides you with the opportunity to profile your customers and identify where more people of a similar type live. A review of your customers’ profile will also let you see more about them, giving you the chance to think what other goods they may buy from you or how you can link to other businesses in a partnership. In this way your customer list will become one of the biggest assets in your business. Can you form a ‘customer club’ of some type, offering rewards for repeat purchases? You could also consider running joint promotions with other businesses to enable you increase sales and revenue per customer.
Once you know who your customer is you can consider how to promote to them: door drops, radio advertising, external signage, customer get customer schemes, bill boards, local press advertising and contact with local special interest groups are all ways in which you can find more customers.
Q. How Can I Get More Visitors to My Visitor Attraction?
A. This is another situation where demographic profiling can help. Few attractions have a database of their visitors. However running a visitor survey over a few weeks will enable the attraction to get a good list. It is also helpful to monitor which day of the week visitors attend as different types of people are likely to visit on different days – with more families at weekends and more retired people during the week.
By analysing the list you will be able to gain an insight into the type of person visiting by day and also identify what the primary catchment area for your attraction is. Using this information you can then identify who and where you wish to target. In many cases, the profile of visitors drawn from the immediate area will vary quite considerably. However as the journey time increases, the specific types of visitors attracted will become clearer. So analysis by distance is vital to gain an effective understanding.
How to get more visitors? Consider working with other attractions who draw similar types of visitor, marketing to specialist interest groups through advertising or direct contact, targeted advertising feature specific benefits for your main demographic groups. Local tourist information centres are other obvious outlets to be contacted, in addition to coach operators based in the areas where your visitors live. Consider advertising in motorway service stations en-route to your attraction and in local hotels.
Annual visitor passes is another possibility, as are offering special rates to visitors staying with local residents. Some attractions offer lower entrance rates to local residents as a way of apologising for the traffic they cause. This local goodwill may also lead to increase visitor numbers.
PR opportunities are generally plentiful for attractions – but remember that if a visitor creates a good story, that will interest not only the local press but also the media operating in the area where the visitor comes from.
The above demonstrates that there are many ways to get more customers into your business whatever it may be. There is a large arsenal of promotional tools available, it is simply a question of selecting the most appropriate for your customer and your business. It is also essential that, whichever methods you use, you measure the effectiveness of your marketing activity.
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