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How to leverage existing customer base to increase business?

Lotika Goswami
Nov 2011

Customer is God

Customer is King.

A customer is referred to a current buyer or user of the product of an individual or organization. This is typically through purchasing or renting goods or services.

The word derives from 'custom' meaning 'habit'; a customer was someone who frequented a particular shop, who made it a habit to purchase goods of the sort the shop sold there rather than elsewhere, and with whom the shopkeeper had to maintain a relationship to keep his or her 'custom', meaning expected purchases in the future.

Therefore, it is imperative to manage company's relation and interactions with customers to ensure sustained business and further increase in business.

We need to appreciate the significance of Customer Management prior to discussing few approaches of customer management.

Understanding the customer base, why this is very important!

Generates incremental business

An engaged customer will provide more business than a regular customer for a simple reason, an engaged customer always feel closer to the brand and will tend to prefer the brand over others.

Decreases cost of acquisition

To generate business from a new a client is a time taking arduous endeavor however same amount of incremental business from existing client will require less investment in terms of time, effort and other resources.

Increases Customer engagement

An engaged customer will prefer the brand over other brands because of the affinity that gets created by engagement programs.

To appreciate and further build credibility and incite word of mouth marketing

A highly engaged customer is the best source of advertising it builds very strong credibility in market and they are the best media of inciting word of mouth marketing.

Existing customers can function as Brand ambassadors to expand customer base.

Segmenting existing customer base

To appreciate existing customer base it is imperative to bucket them in homogeneous groups and to design customized need based program and carve focused communication.

Segmentation is also important to have better evaluation and control of customized programs by proper understanding of each group.

Appreciating parameters to segment customers

1) High revenue yielding low volume giving groups

This group primarily comprises of customers, providing high ticket but very low volume business may be 2-4 orders in a year. With this group the emphasis should be to increase the volume, 6-8 orders in a year.

2) The initiatives that we can undertake to influence their behavior are:

Design special long term engagement plan, special offers and special benefits for a specific period to influence volume.
Increase communication to them via mailers, seasons greetings etc. Ensuring very crisp and focused communication to them.
Engage in regular meeting to gather insights about their buying behavior.

3) High volume and low revenue yielding group

This group comprises of customers providing high volume of business but low revenue, they may place 40-50 orders but of very small size.
For these customers,

It is imperative to gather intelligence about their capacity.
Based on the insights, design a long term special offer for them.
Manage regular communication to them.

4) Group of customers who have given some business in last 6 months

This group comprises customers who have given very limited business in last six months, and have the potential to provide very high business.
To address these customers:

It is imperative to gather insights about their capacity and business preference. And design special offers for them.
Based on the insights, design a long term special offer for them.
Manage regular communication to them.

5) Customers who have not given any business is last 6 months

This group comprises customers who may be considered as 'dead', those needs to be revived.
This group requires most investment in terms of efforts and time however not to miss the returns that waits from the same group.
Hence it is imperative to gather insights and intelligence about the change in their behavior.
Each customer would require customized and personalized plan and approach.
As a standard practice manage regular communication and meeting with them.

The Result

Increase in number of clients and increases in revenue will automatically impact the bottom-line of the business.

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