Do you know which of your customers are the most profitable? Are they repeat customers who buy often, or are they customers who purchase less regularly? Being able to tap into this kind of knowledge is essential to business success.
Understanding customers
If you can focus on your customers and understand their preferences and buying patterns, it will help drive customer loyalty and long-term success. There are a number of ways you can determine your customer needs.
Build your understanding over time
Reviewing your customers will help determine how they’ve reacted to the launch of your business. You’ll also find out what they like and don’t like, and could change, update and improve to better cater to their needs.
It’s important to keep track of your customers and their behaviour, so that you can work on predicting their needs, staying in touch with them, and improving the relationship.
Developing a customer database is one way to do this, and will help you to:
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Know where your customers are from so you can target these areas with marketing.
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Record what people are buying, or what services they’re getting the most use out of. You can then get an idea of the complementary products or services you might be able to add. Bundling products or services together can increase sales, as long as customers also have the option of buying those products separately.1
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Keep track of when your customers are buying as well as how much they’re spending. It helps you target your most frequent customers with offers and discounts, when they’re likely to buy again, and when you’re the busiest.
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Use accounting software like Xero, MYOB or QuickBooks to track your sales information and trends. This way you can get an overall picture of activity. Once you have accounting software you can integrate your accounting package with your NAB account to make bank reconciliation fast and easy.
Understand their likes and habits
Information like sales trends tell a story. But to really know your customers, try talking to them directly about what they’re buying, the services they’re using, and why.
Staying in constant touch with your customers on platforms like Facebook or Twitter can be highly effective. These and other social platforms are changing the way we access, consume and receive information.
You could run face to face focus groups and online or email surveys too. Plus, don’t forget the most effective method of all – just talking to them.
When customers are in your store, on the phone, or you’re at their home providing your service, engage them in conversation. Find out what they like and don’t like about your business, as well as new products or services they’re hoping you might include.
Gathering information like this means you can personalise your products and services and it will help you better respond to the needs of new customers.
Love your customers
Develop a number of ways to get in front of your customers as often as you can. Show them they’re important to you by:
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developing a customer loyalty program that offers discounts, rewards and other incentives
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inviting them to events or meeting your most important customers on a one-on-one basis. Find out their interests to build strong relationships
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giving them as many options as you can to engage with your business. Be available online or in person. Have your salespeople make regular visits and follow up finished business where suitable with an aftersales care call
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offering to personalise what you offer, especially if their specific needs are not being met. For every customer complaint there are 26 other unhappy customers who have remained silent.1
Finally, being customer focused provides long-term success
Understanding your customers and getting to know them is critical for any business.
If you can demonstrate your customers are important to you and that you’re responding to their needs, you’ll create a relationship in which they feel valued. It means they’re going to keep buying your products and using your services.
They’re also going to provide you with the most effective and valuable form of advertising of all, word-of-mouth.
1 50 Essential facts about consumer behaviour
Source: NAB
Reproduced with permission of National Australia Bank (‘NAB’). This article was originally published at https://www.nab.com.au/business/small-business/moments/manage/planning/understand-customers
National Australia Bank Limited. ABN 12 004 044 937 AFSL and Australian Credit Licence 230686. The information contained in this article is intended to be of a general nature only. Any advice contained in this article has been prepared without taking into account your objectives, financial situation or needs. Before acting on any advice on this website, NAB recommends that you consider whether it is appropriate for your circumstances.
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