According to the influential economist and Harvard Business School professor, Theodore Levitt, the purpose of all businesses is to “find and keep customers” customer retention for SMEs is as gaining new customers. A customer can be someone or even a business that buys another product or service.
Customers are essential to any business; they are the backbone and spine of any business. For business success, it is essential to understand the needs, specifications, and behavior of the customer. Judging by the earlier statements on the importance of customers to a business, it is only imperative that every business understands how to gain and keep customers.
As stated earlier, a key function of every business is to “find and keep customers.” Instrumental to achieving this function is marketing. Marketing generates value by creating connections between people and products, customers, and companies. The role of marketing is to identify, satisfy, and retain customers.
These 3 essential roles are linked to how businesses are created in the first place. Before starting a business, it is important to know and identify the wants and needs that can be satisfied, as well as the prospective customers who possess these wants or needs; not forgetting to identify prospective competitors, their strengths, and their weaknesses.
Secondly, it is integral to focus on satisfying the customers by delivering a product or service that addresses the needs found in the first process (identify) and also meeting those needs at the time the customers want it. The key to customer satisfaction is making sure everyone feels they benefit from the exchange.
Your customer is happy with the value they get for what they pay. You are happy with the payment you receive in exchange for what you provide. The success of any business does not stop at identifying and satisfying customers and their needs, it is also imperative that customers are retained for repeat buying and referrals. Customer retention creates new opportunities to maintain customers’ loyalty and to build a business relationship.
This is where market research is very important because it helps you answer these questions about your customers. After identifying all these, there is the need to advertise the product or service you offer so the audience will have a better understanding of the product or service being offered; because ’word of mouth’ of a customer can either make or break a business.
How businesses gain customers
Since customers are really important to businesses, it becomes vital to know how they can be gained.
One of the ways to get customers is through advertisement or promotion of products. An advertisement is the paid promotion of a product or service to an audience through media in order to attract interest, engagement, and sales. There are different forms of advertising; TV advertising, Radio advertising, newspapers, magazines, etc.
Advertisement is a guaranteed way of reaching prospective customers. The effect of advertisement can be seen in boosted brand recognition, etc.
Testimonies are key in gaining customers, it is more believable when testimonies are coming from people who are using or already used the product. Word of mouth marketing is when a customer talks to a friend, family, or colleague about a company’s product or service. According to Nielsen, 92% of people around the world said they trust recommendations from friends and family (earned media) above all other forms of advertising. This is another method companies can adopt by providing good customer service and accurate information to customers.
When customer journey leads to satisfaction, it often leads to continuous buying and in the long run referral. A repeat customer is a customer who buys again and again from a company from which he has purchased or has received services before. These customers are easy to get, by simply just maintaining a good customer relationship and interaction with them.
Great/satisfactory service calls for referrals; Referral is when someone in your network recommends your business to a potential customer. This may happen spontaneously during organic conversation or as a result of conscious referral marketing efforts. Friends and family can fall under this category.
A good relationship with other businesses especially in the same industry can also bring new customers. Targeting and working together with businesses that have similar customers but are not your competitors in the market.
Numbers support these claims; According to a survey carried out with Business owners in two states in Nigeria, respondents were asked how they get most of their customers.
Based on the chart above, it is clear that most of those interviewed get their customers through referrals based on the satisfaction past customers derived from their services. Also, 1% get their customers through advertisement/promotion. The reason most Ads fail is that the Ads are more Brand focused than customer/consumer-focused.
Some businesses face the challenge of getting new customers. It could be that potential customers are not aware of them or they are not promoting themselves as well as they should. It may even that they do not understand the taste or preference of their target customers.
A question was further asked regarding the challenges the respondents face when getting new customers. For most of them, the main challenge was awareness. While a few of them do not even know how to get new customers.
To make a product or service visible, you will have to locate your target/potential customers. It has become evident that a large percentage of the population can be found on social media, this is a space that can be explored, businesses can update their social media pages with products or services they offer and even advertise online to gain the attention of potential customers. Now, most people do not go out to look for products or services, instead they search online.
This is an opportunity for businesses to update their websites with good, quality and interesting content that will draw the attention of potential customers. Also, business should adopt online reviews from past customers to make necessary Improvements. Promotions could also be employed in order to gain a larger market share.
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