In this video, view research and sales data that shows that referred customers are the most valuable to a business.
- One of the surest ways to increase your business' profitability, is by understanding loyalty and leveraging it to build that within your current customer base. First of all, by understanding the value of loyalty, you'll understand how it plays into your business as a whole. Do you know your customer lifetime value? Loyalty is one of those ways that you can increase the customer lifetime value. What happens if you were to increase your repeat customer business by just 5%? If you ran the numbers on that, you'd be convinced that this is a great idea.
So think about how much you market to your existing customers in developing brand advocates. People are loyal to a brand when they feel as though they have received value. When they've been recognized, and appreciated. That's what makes them loyal. And so the more you show that value, that appreciation, and also letting the customer know at a personal level that you certainly appreciate their business, it increases their loyalty.
This is valuable because every repeat customer is worth five new customers. That's because the cost to acquire those new customers is completely eliminated when someone who you already know and who's already in your database comes back and buys again. Also, loyalty drives referrals. People love to tell others when they've had a great experience. So how do you know when your customers are ready to be referral sources? There's a simple question, and maybe you've received this question before.
In some questionnaires they'll ask you, "How likely are you to recommend our product or our company to a colleague or a friend?" Do you remember seeing that? If so, you might also remember the answer scale. It's from a zero to a 10. Now, if you are not likely to recommend, you're a detractor. That means that you've answered somewhere between zero and six. If you answered seven or eight, that means you're passive. That means you had an okay experience with the company, but you are not ready to commit to being an advocate.
If you answered nine or 10, that means that you are likely to promote the company, given the chance. You come up with your net promoter score through subtracting your detractors from your promoters. The net promoter score is all based on that question, "Are you willing to provide a referral to a colleague or a friend?" Now, it's very interesting because if you ask open-ended questions along with that survey, you'll find that each group also uses very different language.
Your promoters are very excited. They use words that reflect that. Passives will always give a positive, but then a negative, such as the price. Detractors at least have tried the product, but they didn't see the value. Now what I love about promoters is that usually, when we perform this type of survey, we ask promoters, "How did you find out about this company?" Most promoters found out from other promoters, and so, it's a logical step that promoters breed promoters, and it's your least expensive marketing channel.
It's word of mouth. Customers developed from word of mouth are usually happier, more satisfied customers, and they stay longer. And so, in order to create loyalty, it comes down to rewarding your best customers, recognizing them, and responding to them when they communicate with you. Make it easy for them to share your brand message. Make it promotable, such as Nike's Just Do It. On our example site is "explore our world your way." It's a simple way to communicate how we meet your need, and they can share it with their friends.
You see, referred customers are 25% more profitable, 18% less likely to leave your company, they have a higher customer lifetime value than average, and because they're referred, you didn't have to spend the acquisition costs to get them, so they have higher margins. Listen and learn from your best customers. Know who your best customers are, and reward them. And also, focus on them. Give them a simple message to promote your company to their friends.
Discover why a successful business strategy starts with you, namely your narrative and your value. Learn how to define your target customers, and understand where their needs and your business goals align. Find out how to evaluate the best channel for your message, whether it's Facebook, Twitter, Instagram, LinkedIn, or Pinterest. See how to develop a calendar for putting the right content in front of the right people at the right time. Plan for success by researching SEO, trending topics, annual content, and seize-the-day opportunities. Plus, learn how to think like a publisher; integrate content marketing into lead generation; and measure, model, and review your success.
- Defining who you are
- Creating your value statement
- Identifying your customers
- Measuring lifetime value and loyalty
- Researching customers
- Defining marketing goals
- Creating a long-term content calendar
- Curating content
- Measuring and modifying your plan