Free Article – Introduction to Client Nurture
Building your client base
Key Learning Outcomes
- Understand the importance of working to retain your clients and building on your existing business.
- Recognise that the more detailed your client information, the better your client nurture.
- Learn that a potential market can be broken down into four sectors: 100% loyal to your business, “open to adoption”, not loyal to anyone and 100% loyal to your competitors.
- Identify and overcome the common obstacles when creating a client base.
It is well known that for the vast majority of businesses, it is more costly and time consuming to find a new customer than to keep one. Smart business owners work to maximise the return from every existing client through building their repeat and referral business.
When databases and CRM (customer relationship management) systems were new, everyone adopted the idea of capturing client details, although a lot of businesses never quite figured out what to do with them. Nowadays, large organisations spend a lot of money and time trying to build loyalty through their contact databases – think about the frequent flyer airline programs and major retailers as examples.
For small- to medium-sized businesses where promotional budgets tend to be small, it is more important to ensure that every opportunity is being utilised to retain clients and to try and build business from those people that already like us, know us and trust us.
Step one is to capture your client information. If you have not already been doing this then you need to start as a matter of urgency. When gathering information, you want to try and get as much detail as possible. We find that if you ask you will usually receive, although there has to be a valid reason for collecting the data. For example, if you are a retail clothing store and you send out a VIP invitation to view the new-season stock, or perhaps a loyalty program offers a discount to those that participate in the program. You will not get a 100% collection rate but the idea is to build over time and not to pressure clients unduly.
It is important to remember that not all client bases are of equal value. You will notice that we do not use the word ‘database’. This is because we want you to work on building relationships with clients rather than communicating in bulk to a database of names and numbers collected over time.. The better the information that goes into the client base, the better your client nurture will be. If you are able to collect more than one contact point for each client such as an email and a postal address, you will enhance the level of communication you can provide to the client. Don’t forget that you may need to get the information in more than one attempt. For example, in the first contact the client may just give you a name and email. As the trust builds up over subsequent contacts, you may be able to add more information until you build a full client profile.
With every business the total potential market can be broken down into these four broad market share sectors:
- There will be a sector of the market that is 100% loyal to you. The aim is to grow this group so it is as large as possible.
- There will be a sector that is ‘open to adoption’. In your business they may be customers that are dealing with you, but may be ready to jump ship if you do not deliver what you promise. Prospective clients are also in this pool, as they have not yet formed a relationship with either you or your competitors. Our aim with this group is to move them into the client pool and to try and adopt those clients that are in your competitor’s database.
- There will be a sector that is not loyal to anyone. They are ‘up for grabs’ and tend to go where the best deal is, or perhaps deal with the person who is the most persistent or convincing at the time.
- Finally, there is a sector of the market that is 100% loyal to your competitors.
While it may seem on the surface that Group 3 offers an opportunity to build on your client base, often it is difficult to persuade this group to become loyal to any business as they tend to be more price-driven and would deal with your competitor if a better deal was offered.
Ideally, you want to look at how you can maximise business from your Group 1 clients and build loyalty into Group 2. The key to success in small business is to build loyalty through enhancing client relationships. One of the reasons people deal with smaller businesses is that they want a more personalised level of service; they want to feel a level of recognition when they walk through the door or phone you.
If you have been collecting your client information, you will need to go through and categorise your clients into the four sectors outlined above. Once this is done, a structured nurture program can be designed for each group. This can be a big task for many of our clients as often names and numbers have been collected over a long period of time and the quality of the data can vary. There is no short cut for this step; the best advice we can give is the sooner you start sorting the data, the sooner you will get it done. If you are using some type of CRM software it may be easier to export it into a spreadsheet so that missing information can be identified easily.
For some businesses that are experiencing problems, setting up a new client base has been the answer, so only clean data is entered. The key is that the Group 1 clients need to be identified to enable them to be contacted on a more regular basis.
We often see that when businesses initially set up a CRM system, a lot of client categories are used. We have found that if you simplify these it can make your client nurture system much easier to manage. You will almost certainly want to break down your Group 1 clients into a couple of sub-groups. For example, a real estate agency may want to separate buyers from sellers, as the content of the communication may differ for each group; or a retail business may want to group clients depending on the product range they buy.
The two most common objections we get when talking about sorting the database into a client base are, “we do not know where to start” or ‘”we do not have the time”.
Where do we start?
We usually find that these clients are not using the data to any advantage and it is unwieldy and often incomplete. We recommend that you break it down, working with one category at a time, with the priority being to identify your Group 1 clients. There is little point in having 10,000 contacts in a database that you do not communicate with. It is better to have 1,000 clients in your client base that are loyal to you and your business, and are most likely to be the source of additional revenue.
We do not have the time!
There always seems to be something better or more important to do than sorting the data. Usually these clients have large volumes of data that has been collected but not acted on for some time. Cleaning up the client base is one of those activities that is important but not urgent, and is therefore something that you need to make time for. As mentioned above, the best thing to do is to break the database down. If, for example, you have 10,000 contacts, try to go through 100 a day and identify who are your Group 1 clients.
Another common question is “can we start our nurture program before we have a clean client base?” Our answer is ABSOLUTELY! Let’s imagine you want to send out a personalised letter to your clients. You would need the first name, surname and a mailing address. You go through the system and out of 10,000 contacts you may have all of these details for only 250 clients. Some people would say, “well that is not very good!” However, at Absolute Best we would tell you that this is fantastic news. You have 250 people that you can mail a personalised communication to today! Our aim for you would be to get the first letter out. Your plan may be to do this every three months, so success for you would be to see the number of clients you can mail to grow each quarter.
Once you are committed to the idea of nurturing your clients and building your business from a base of people who already know and like you, the next step is to design your client nurture program; we have several articles to get you headed in the right direction.
Don’t forget that too many businesses focus on getting new customers, and tend to treat these people like kings. They forget that their greatest asset is often sitting under their noses, or rather in that unwieldy database. It’s time to start turning it into a goldmine of clients.Did you enjoy this complimentary article?
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