Increasing sales by targeting your existing customers is one of the most effective and predictable ways to bump up revenue. And, thanks in large part to heated competition among new and established companies offering marketing technology, companies of any size can choose among a wide range of low-cost and free marketing tools that can help them nurture, upsell and cross-sell those customers.
According to data from the non-profit business organization SCORE, 51% of business owners believe analytics are critical to their businesses, but only 45% are actually analyzing customer or other data. What’s stopping them? Forty-two percent don’t have time, 28% lack the necessary knowledge and 22% can’t handle the costs.
If you are one of the many business owners who aren’t analyzing your customer data—and you want to gain more customers and get more revenue from the ones you have—what should you do?
Step 1: Gather the right data.
“Before you even start to profile your customers, you must have systems in place to capture information you can act upon,” says Brad Tornberg, principal at E3 Consulting Partners. “What output do you want? Work backwards from there.” One of his clients markets to families with children, and kids’ birthday parties drive visits. The client had been capturing only the number and names of the children; however, by beginning to gather birthdates, the company can send targeted messages to customers when they are most likely looking to make another purchase.
Step 2: Start simple.
There has been an explosion in marketing technologies that handle customer relationship management (CRM), marketing automation, outbound email, analytics, social media posting and monitoring, and “full-stack” solutions that combine them all. Tornberg advises businesses to start small. For example, start with the free functions of a social media tool like Hootsuite or Buffer and upgrade as you gain experience. One mistake many business owners make is to fall in love with all the potential functions of software, but—after they’ve committed to a technology—they don’t know where to start and often don’t use it at all.
Step 3: Segment your customers.
Drilling into your customer data to distinguish different customer segments is the key to focusing on groups that will bring the greatest return, eliminating wasted efforts and leveraging personalization so your marketing will stand out from the competition.
If you’re in the construction business, for example, you might have clients who want you to reface cabinets and customers who want to add an extension to their homes. Because the latter customers will spend a lot more money with you, you want to find more like them. Do they live in certain neighborhoods? Does their spending relate to their house’s resale value? Is the age of homeowner a key factor? These details can help you send the right messaging to the right customer.
Step 4: Find low-hanging fruit.
Data on the timing of purchases, the average size and number of purchases per customer, and traffic patterns can yield insights that help you smooth out the rough spots in your business, says Tornberg. For example, most clients visit a beauty salon on Thursday, Friday and Saturday, but analytics can identify certain pockets of time earlier in the week where the owner can drive much-needed business. If Tuesday and Wednesday afternoons between 3 p.m. and 5 p.m. have the least traffic, the owner could advertise half-price haircuts for kids. Although the top line will be lower, the salon will be busy and moms might use full-price services while they are there.
Step 5: Look ahead.
Although email is the most-used marketing channel by small businesses today, customers are so swamped that email opens are going down while unsubscribes go up. One way to get around your customers’ hesitancy to opt in is to work with media sites, social networks or digital advertising platforms that provide behavioral data you can’t get yourself. This doesn’t have to be costly. A new service from Facebook called Facebook pixel, which enables advertisers to measure, optimize and build audiences for their campaigns. Tornberg notes that Facebook is a popular and relatively inexpensive way for small businesses to advertise, and the pixel tools are free.
Step 6: Learn, adjust, repeat.
Like any marketing technique, you will get better with data and analytics as you gain experience and as technology advances. Once you are gaining new insights about your customers and making your marketing much more effective, you’ll wonder how you ever got by without them