Congratulations: You and your company have worked harder and smarter than your competition, making it through the initial phases of starting up, while many competitors went out of business.
But now, what do you do?
One of the many benefits from this is that when competition dwindles, you can reap the rewards. With a healthy economy and, as a result, competition growing, it’s time to place your company in a powerful position via marketing. You need to determine how to take on new competitors now that there’s more business to go around.
Here are five tips that will help you thrive as competition increases.
• Measure your customer-service levels and elevate them — When competition is less aggressive, customer-service levels dwindle. It’s simply the nature of business. Most companies don’t provide high customer-service levels and as a result, don’t incur the associated effort and/or expenses.
With competition in many industries increasing, it’s time to improve your customer service. Survey your customers via email to determine the weakest areas of service. Work hard to fix your service problems by investing in training or hiring more employees.
• Reward your customers — Develop a loyalty program that provides customers with incentives to return. If your customers have the equivalent of a bank account full of pending rewards from you, it’s virtually impossible for them to avoid coming back.
Make your customers feel invested in your company, because you’re investing in them. Develop a successful loyalty program with a high perceived value, and get results by setting up attainable tier levels.
The “My Starbucks Rewards” program at Starbucks is a perfect example of a well-formulated loyalty program. It requires the purchase of only five espresso drinks to achieve the first level (green) of the program.
Most people can easily reach this, and then they’ll get various rewards with a highly perceived value for using the card. Rewards include free syrup and free specialty milk options, as well as free mail offers for trial products.
The next tier is gold — 30 espresso drinks. This is a bit of a stretch for most people, which is good. It requires a Starbucks customer to think twice before going to a competitor if they want to enjoy all of the benefits of gold card status.
This status includes an attractive gold card and payoffs such as free espresso drinks.
By instituting this program, and electronically gathering demographic and purchasing data of its participants, Starbucks can use this information for marketing campaigns that yield trackable results. Loyalty programs can be tricky to set up, but they are well worth the effort. Make sure to calculate your customer reinvestment percentage for program participants so that the program you put together is profitable.
Follow these steps
• Lock down your customers — Now is the time to cash in on customer loyalty by getting their commitment. Develop a membership package that provides incentives and rewards with enrollment, such as free service, a discount or a free product.
Once a customer agrees to sign up for a membership package, they’re unlikely to cancel it. You’ll have their credit card on file and formal permission to charge them a monthly fee automatically. This will make it easier for customers to continue their memberships with your company, rather than you enduring the discomfort and inconvenience of starting this process with potential new customers.• Leverage marketing technology now — What happened to that smartphone application or web-marketing campaign that’s been delayed for months? Now’s the time to execute it.
With competition encroaching, leveraging technology-marketing efforts to your advantage is no longer an option — it’s a must-do. If you fall short in this area, your competitors will use this to their advantage and steal crucial market share from you faster than you can blink an eye.
Marketing technology, such as creating a smartphone application, is probably faster, easier and less expensive than you might anticipate and simple to execute. It might save you money and lower your print, postage and mailing expenses.• Stay true to your financially responsible marketing roots — Remember that an improving economy attracts more advertising vendors that will prey on you to spend your marketing budget. Don’t be tempted.
You should invest in new marketing methods that can be tracked and tied back into a return on investment analysis. Remind yourself of the hard work you did by cutting back on advertising methods you had a hunch they weren’t working, when times were tight.
Leverage this to your advantage and discriminate about what you add back in.
Consider marketing methods that have trackable results, such as direct mail and Internet marketing campaigns. Include offers in these campaigns that are segmented, based on customer value or projected value, and that have potential to boost response rates.
Sarah Procopio, President of Thrive Marketing Science, a business intelligence and driven marketing firm. Sarah specializes in loyalty program development and turning around flailing companies and marketing programs quickly. She can be reached at email@example.com or 949.230.7873. This article was original published in the Denver Business Journal and can be found at https://www.bizjournals.com/denver/print-edition/2011/04/29/prepare-your-marketing-for.html