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Born from a fear of losing customers to competitor pricing, many small and medium-sized businesses (SMBs) feel tied to broad discounting, old contracts with unreasonable terms, or maintaining customers who cost more to service than they are actually worth.
It has never been easier for price-motivated buyers to research alternatives and switch suppliers, so it is unsustainable to make non-loyal, price-first commodity buyers your focus. The key is to think of your prices as exchange rates on the value that your business creates for your customers. Everything that your representatives do helps justify a premium over a pure price play at web or big box competitors.
What SMBs have over the big players is the secret weapon of personalized service. Developing genuine relationships with your customers, understanding their businesses and their needs, and discovering ways to add real value are the keys to differentiating your business and brand from competitors.
82% of companies agree that retention is cheaper than acquisition, and 56% of customers will stay loyal to brands that "get them," so how do you reach the height of loyalty and increase margins?
Understand Your Customer
Distinguish between online buyers and relationship buyers and business buyers from individual customers. Develop customer segments based on the categories that comprise a majority of their purchases. Survey your customers with the goal of establishing buyer personas that will enable you to conceive of each segment as an individual person. This will make it much easier to put their needs first. You'll want to understand why they choose to purchase certain items from your business and why they are buying other items that you sell from competitors.
With a better understanding of your customers, you can target them more effectively with marketing communications and tools like self-service portals, priority access, loyalty rewards, and flexible payment methods. You can tailor promotions to their needs and incentivize them to increase average order value, monthly orders, loyalty, and even customer lifetime value.
B2B customers are loyal to businesses that provide an outstanding customer experience. A Walker study found that by the end of 2020, customer experience overtook price and product as the key brand differentiator. https://www.walkerinfo.com/kno...
Today's customers want to be able to interact, engage, and buy from you across multiple channels. Adobe recently found that companies with the strongest omni-channel customer engagement strategies enjoy a 10% Y-O-Y growth, a 10% increase in average order value and a 25% increase in close rates. https://www.adobe.com/content/... Make sure your website offers a clean, mobile-friendly experience that is engaging and easy to use.
By providing a great customer experience, you promote loyalty and can actually increase margins without fear of losing customers. Consider that 82% of businesses say they'll pay more for a great experience and experience-driven businesses see almost 2x higher YoY growth in customer retention, repeat purchase rates, and customer lifetime value than other businesses.
https://www.pwc.com/us/en/serv... - 82% link
https://www.adobe.com/content/... - 2x link
Investing in the customer experience increases customer satisfaction and retention and improves opportunities for up-selling and cross-selling, both of which increase customer lifetime value. Learn more about the benefits of the customer experience and nine tips for getting profits back when you download ECI's ebook How to Increase Margins and Maintain Loyalty. https://resource.ecisolutions.com/c/corp__increase_margins-1?x=MLZ70z&lb_email=%%email%%
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About the Author