Aug/100
A customer database turns a good business into a great one
It is often said that many small businesses fail because they run out of cash. Put simply, when your bills exceed your income, any cash you have put aside will be eaten away until there is none left. If you have no cash to pay your employees and suppliers, it’s time to close the doors for good.
There can be a fine line between a business that is generating cash and one that is burning cash rapidly. For a restaurant, one or two percent gross margin on each dish and each drink can easily be enough to make the difference. As can a few more customers each day or one more pound spent, on average, by each customer.
Similarly, the differences between a business that is breaking even and one that is making a healthy profit can be subtle. Once a restaurant is making enough money to pay the overheads, every additional pound taken, minus the cost of ingredients and tax, goes straight into your pocket. Five more customers a day can easily put another £20,000 each year in your pocket.
£20,000 with just five more customers each day! That is probably less than one percent of the people who have visited your restaurant in the last month alone. And there is a simple way to find those extra customers without spending more cash on advertising – build a customer database. Capture the contact details of every customer and reach out to them regularly with a compelling reason to come back in.
Considering the financial benefits, why do so few business owners bother to build a database? Perhaps because it is a long term strategy, which will not start to pay off until a good database has been built. If you are one of those owners, remember that there is only so much you can do to reduce costs in your business. And keep in mind that customer communication is something that your competitors may be doing.
You are paying rent so that you can invite people into your shop or restaurant. Letting them leave without establishing a way to keep in touch is one way to eventually prevent you from being able to afford that rent.
Aug/101
Restaurants lead the way online
Restaurants, above most other types of local business, have the greatest opportunity to acquire new customers through online marketing. It is not only that they are catered for by a number of online companies offering to bring them new diners. It is also that people like to research online before deciding where to eat. Your job, of course, is to make sure that the people searching in your area decide to book your restaurant.
Having recently completed a review of the various services available to bring new diners to restaurants, I’m unable to think of a good reason why a restaurant should be without one of these.
Take Livebookings as an example. They work with over 500 websites, such as Yell.com and TimeOut, where diners go to search for restaurants. That is a total of 500 million potential diners worldwide. As the UK is a stronghold for Livebookings, a significant number of those 500 million will be potential customers of yours. If you use Livebookings, any of those people can book a table at your restaurant with a couple of clicks of their mouse. And you get an online booking facility for your own website too. The price for access to these new diners? A small fee for each new customer they bring to you.
Once you have those new diners in your restaurant, it is down to you to capture their contact details, particularly email and mobile phone number, so that you can entice them back in. Good food and service is not, by itself, enough. Particularly as there are almost always other good restaurants nearby. People are busy and have lots of choice. Collecting their details enables you to remind them, by email or SMS, about your restaurant and perhaps lure them back this week with a tempting offer.
Jul/100
The new word of mouth
Everyone understands the power of word of mouth recommendation. We want our customers to tell their friends how great we are so that they will become new customers. For a local business owner, word of mouth is even more important because you can’t afford the marketing campaigns that bigger companies run. Plus, it has the power, by itself, to make you very successful. If all of your customers’ local friends became your customers, you would probably be unable to cope with the demand.
Of course, word of mouth begins with a great product or service. It is this that makes your business worthy of conversation. People love to share positive experiences with their friends and they love to help others find positive experiences. Provide a memorable experience and you will become a part of their conversations.
But that is not enough. You need to make it easy for your customers to talk about you. The fact is that people have many of their conversation online, particularly in social networking sites such as Facebook. And some local businesses are already encouraging their customers (your prospective customers!) to talk about them online.
Don’t kid yourself that ‘this social networking thing’ is just a fad that will never take off. Understand that this has taken off and will only become bigger and more important. In the UK, people are already spending more time on social networks than on search engines like Google. Realise that you can become more successful if you understand how to get people talking about you online.
Nothing has changed. People still have the same motivations. People still enjoy sharing their experiences of a great (or bad) product or service. What has changed is the way people are talking about it. Instead of always having to find reviews or recommendations for products or services, those reviews or recommendations are finding your customers through their online friends.
May/100
Amplify word of mouth with social media
Everyone is talking about social media. The discussion revolves around social networking websites such as Facebook, Twitter and MySpace amongst others, and whether these sites can be used to grow your business. Is it something you should be looking into?
First of all, two questions: Do your existing customers use the social networks? If not, are there people who use the social networks that you would like to have as new customers for your business? The networks are used by so many different people across different age groups and walks of life that your answer is likely to be ‘yes’ to at least one of those questions.
As a local business, a great deal of your growth and prosperity is due to word of mouth. Give your customers a product or service that is remarkable enough and they will enthuse about you when they talk to their friends. That’s nothing new, so what?
Well, the point is that many people spend time ‘talking’ with their friends on social networks. For example, Facebook has over 22 million users in the UK at present. This is around a third of the total population. Facebook users are getting older and their average (median) age is 33 (as of November 2009), so they’re not all kids. In fact, the fastest growing segment on Facebook is 55-65 year-old females. Facebook users spend a total of 8 billion minutes per day on Facebook. With around 300 million users worldwide, that’s an average of around 26 minutes per user per day.
Outside of the social networks (in the real world!), you give people a reason to visit your business, you give them a great experience when they visit and they, in turn, refer their friends.
The good news is that it’s the same process in the digital world of social networks. Let’s take Facebook as an example. You create a Facebook page about your business and you fill it with regularly updated, engaging content (information, photos, news, updates etc) such that customers have a good reason to visit it regularly. If your content is good enough, they might interact with you by leaving comments or adding messages. With the click of a mouse button, they might also share your content with their social network friends, many of whom will live nearby. Think of it as a turbocharged website for your business, which is much easier for you to maintain and much easier for your customers to interact with than a normal website.
There are two things to note about this scenario. Firstly, your customers are interacting with you in their spare time! Secondly, they are sharing their enthusiasm with their friends, not just one or two but potentially hundreds, all with a simple click of the mouse button. The speed at which word of mouth can grow online, and particularly through social networks, is the reason why this type of marketing is often referred to as ‘viral’.
Your main challenge is not about learning how to use the social networks. This is easy to learn – you just need to get stuck in. The key to your success is to make your content engaging and update it regularly enough to provide your customers with an incentive to visit regularly, share it with their friends and grow your business in their spare time.
To get your creative juices flowing, here are some of the most popular Facebook pages in the world today:
www.facebook.com/Starbucks
www.facebook.com/skittles
www.facebook.com/pages/Nutella/24932281961
www.facebook.com/michaeljackson
Mar/100
Forget advertising. Grow by word of mouth alone.
Everyone knows it is great to have word of mouth but how do you make it happen? Conventional wisdom says that all you need to do is provide a good product or service and word of mouth will do the rest. The truth is that it is less straightforward than that and there are a few subtle issues to contend with.
Some people love to find new things and tell their friends about them. If your business is something new or different, you’ll need to seek out early adopters because many people don’t like change. Your effort to find early adopters is usually rewarded as these people love to tell everyone about the great new things they have discovered. A word of caution, though. If you expect people to change their buying habits for you, your product or service will need to be remarkable.
What if yours is the type of business people don’t talk about very much? How often have you raved about the wonders of your gynaecologist over dinner with your friends? Do you talk about contents insurance at the pub? Not every product or service can grow by word of mouth alone.
Can you make it any easier for people to talk about you? Think about how your customers communicate. Can you send an email or an SMS with a special offer that they will want to forward to their friends? How about creating a Facebook page for your business and posting news, events and offers there? When someone becomes a ‘fan’ of your Facebook page, their network of friends will be able to see that.
Let’s assume you have provided a great service, you have given people a reason to talk about you (maybe an incentive), you have made it easy for them to remember you (perhaps a branded box of matches to take home or an occasional email update), made it effortless for them to talk about you and you have identified your most influential customers, paying special attention to them. What next?
Well, what do you want them to say? Can you describe what is great or unique about your business in the few seconds of captive attention you would have if a prospect were travelling in an elevator with you? It’s not always obvious and big businesses spend thousands working out their ‘elevator pitch’. If you can’t, it’s very unlikely that your customers will be able to. If you think it could be hard for customers to ‘sell’ your business in a few words when they bump into a friend at the supermarket, do something about it. Come up with a strap-line for your business and make it visible in your premises, on your van or your business card.
The good news is that, for some types of businesses, such as restaurants and bars, word of mouth alone can bring great success as long as they pay attention to the subtle details. For others, they’ll need to think carefully about how to get people talking about them.
Feb/100
Try not to be perfect
Sometimes it can feel like your local business simply isn’t progressing. Even though you are putting in long hours and trying to do everything right, things just aren’t going your way.
Your manager forgets to put the new menu out even though you reminded him twice. Your supplier shows up late, leaving you short of stock for a whole day. A staff member calls in sick on a busy shift. You constantly interview people just in case someone leaves at short notice, but half the time, interviewees don’t show.
Problems such as these make you feel like your hard work is getting you nowhere. It seems that, no matter how much you do, things will never be exactly as they should.
And, in a way, you are right to feel this way. Things will never be exactly as they should. Things will never be perfect. There will always be at least one small thing that goes wrong. If you are striving for perfection, you will never quite get there.
But the thing about striving for perfection is that your competitors will never quite get there either. They have many of the same problems as you do. Like you, they also have to work hard to make their business almost perfect. And you can bet that they often feel like pulling their hair out too.
So when times are tough and it feels like things aren’t working out how you planned, just remember, you don’t need to be perfect. You just need to be better than your competitors.
Feb/100
Write to sell
You will sometimes communicate with your customers or prospects in writing. This could be by email, text message, your web site, a printed brochure or, increasingly less often, a letter.
If you are writing to create a defined response, such as to increase sales or engender loyalty, there are things you can do to get best possible results. Read on to find out more.
If you are not writing to create a defined response, you are probably wasting your time. More to the point, you are squandering a valuable and limited resource – your customers’ attention to you.
Having just read ‘Write to sell’ by Andy Maslam, I strongly recommend it to you as a quick and easy guide to selling using the written word.
In my opinion, these are Andy’s top five tips for great copywriting. If you are serious about writing to sell, I suggest you read the book.
- Above all else, people are interested in themselves. As Dale Carnegie wrote, a headache is far more important to most people than thousands dying of starvation on the other side of the world. You cannot write effectively unless you understand your audience. So it pays to spend time getting to know your reader and working out what interests them.
- Write about benefits not features. In other words, tell your reader why they should buy, not what they’re buying.
- Make a plan. What do you want people to know after reading? How do you want them to feel? What do you want them to do? Close your laptop and sketch your ideas on paper. Start typing only when you have a plan and a bunch of ideas you are happy with.
- Make your writing simple to read. Make sentences short and never use a long word when a short one will do. Write as you would speak because people, even business people, will relate more easily to you.
- Draft, edit mercilessly, redraft, edit some more. Repeat until you are satisfied that you have achieved what you set out to. Take a break before proof reading.
Feb/100
Do this and you will succeed
What would you say if I told you that there is one thing so powerful that, if you did it, your local business would succeed? Not only make more money, but become a resounding success. Far more successful than your competitors.
But that’s not all. If you do it right, you can tear up most of your to-do list, because it will soon become apparent that there is little else more important than this. Traditional marketing and advertising will become increasingly less useful and you will be able to fire all but your best customers. You will focus on this because it works and you will worry less about other tasks. Your priorities will be clearer and you will have more time and less stress.
Well, such a thing does exist and it is no secret. What you must do is find your 1,000 true, local fans. The 1,000 local people that love your business, trust you and talk about you to their friends and colleagues. The 1,000 local people that come back and buy from you regularly and enjoy giving you their money. These are the people that you must talk to and find out more about. These are the people you must communicate with and focus on.
Stop for a moment and think about the power of this. What is your average spend per customer? What do your best customers spend per visit? What if you had 1,000 customers that liked your business so much that they came back as often as they could? How much would you make in a year? Just from those 1,000? What do you think their lifetime value to your business would be? And what about all of the friends they would drive to your business?
Do you think you would still need to advertise? Wouldn’t it be great to focus all of your attention on making those 1,000 people happy? That would be the single most important marketing activity and it is quite likely that no other marketing would be necessary. When you get 1,001, fire you worst customer to make sure you have enough time to focus on your 1,000 true fans!
You don’t have 1,000 true fans? So start today. If you own a shop, pick a customer today that you think has the potential to become a true fan. Capture their contact details before they leave and think about how you will entice them back in and delight them when they arrive. If you do this each day, you will have 1,000 true fans within around 3 years.
You can start simply by inviting a person to receive your special offers by email or SMS. Then let them tell you what type of things they want to hear about. Next, tailor your offers to their preferences. And when they use your business, give them a simple way to praise or criticise without fearing confrontation or reprisal.
The magic of this approach is that it will make you focus on the important things, the products and services. In order to delight people and convert them into fans, you will need to do this. In addition, you will be forced to focus on the customers, creating a dialogue, finding out what interests them about your products and what they really think about your service.
The alterative is to follow the traditional path. Pay somebody else to rent their fan club, perhaps the local newspaper or radio station, in the hope that you can shout your message at them and that 2 or 3% of them might be remotely interested in you. This is not only hard work, stressful and distracting but it is also completely unaffordable when you consider that your competitors may be building their own fan club for little cost. The traditional path will make you feel like you’re progressing because it consumes so much of your energy and mind space. But if you want to succeed, you’ll need to take a different route.
Jan/100
Dumb persistence
Business people often talk about the importance of persistence and tenacity. Keep trying, they will urge you, even when things look bad. Never give up!
This raises an interesting question. When you feel like you are fighting a losing battle, how can you tell whether you are fighting for a lost cause or whether a victory is just around the next corner? More to the point, will your actions have any impact on the outcome or are you at the mercy of events beyond your control? If persistence is followed by success, hindsight makes you look like a genius. But when you see failure in the rear view mirror, that same quality of persistence renders you stubborn and ignorant.
Persistence, in itself, is nothing to be proud of. In order to be useful, it must be accompanied by an element of critical self-analysis, rule-setting and intelligent action. Firstly, when you look closely at your situation and think carefully, is there really a chance to succeed? What parallels, analogies or evidence can you find to support your view? Once you have made up your mind, you need to set the rule. Decide what you must achieve and when you must achieve it in order to prove that your view is right. If you find that it is not right, then cease to persist, take what you have learnt and put your energy into a new battle or venture. If you leave it too late, you may find that your energy and resources are too depleted for another fight.
Whilst you continue to persist, give yourself the best chance of success by persisting intelligently. Don’t keep hammering away with the same approach, using the same tools. Be creative and find new ways to approach your challenge. The more remarkable your approach, the more likely you are to attract the attention of your customers or prospects. The more varied your choice of tools, the better your chance of keeping their attention.
From the perspective of your customer or your prospect, dumb persistence can be plain annoying.
Dec/090
Extend the Christmas rush into January
Many businesses, such as bars and restaurants, become extremely busy at Christmas time. They make far more money over Christmas and New Year than at any other time of year. They and their staff are completely flat out, their venues bursting at the seams. Then, very suddenly, it’s the 2nd of January and one of the year’s quietest periods commences.
What can be done to extend some of the seasonal rush past December into January and beyond?
For these types of businesses, the premises or venue is perhaps the most significant and costly business investment, as well as the most valuable. The value of a place of business is that it gives direct access to passing trade – prospects that can be converted to customers. A venue makes it possible to build sales from a standing start. Then, once the business is up and running, it provides the opportunity to build relationships with customers in person – something that many web-based businesses can only dream about.
Like any investment, it’s important to extract every bit of value from a place of business. If 8 out of every 10 people who walk into a shop are converted into regular customers, how long do you think it would be before that business would have to start turning people away or extending the shop to cope with the demand? A great problem to have!
This ideal scenario is altogether possible but it is not enough merely to engage with customers who walk in, although that is a great start. You also need to capture their details and preferences so that it is possible to reach out to them and entice them back in future. When you reach out to customers with a relevant and compelling reason to visit your business, some will respond. The more people you reach out to (always assuming a relevant and compelling offer), the more who will respond.
To start with, you need to seize every opportunity to collect your customers’ contact details and learn a little about them. There is no better opportunity than when they have chosen to walk into your premises. And, for the businesses in question, there in no other time of year when more people walk into their premises than at Christmas time.
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