Success Mantra: Retain customers than acquiring new ones!

Every small business must understand the importance of retaining the existing customers. Most small business owners get into aggressive customer acquisition and invest and all their marketing efforts, time and budgets to getting new customers and do not take any initiatives towards retaining the existing ones.
A repeat customer is good for any business but more so for a small business because of the following:

1. A repeat customer is as good as a new customer. Instead of going to the competitor, if the customer comes to you, it means you get a customer without any new investment.

2. Acquiring new customer is far more expensive than retaining an existing one.
Your competitor may take aggressive steps towards acquiring new customers and take away your customers too. Hence, once you have a customer, take extra steps in retaining him. On an average, it takes a small business at least 10 times more to acquire a new customer than retaining an existing one. Hence, the key to saving cost and growing a stable business is to retain the existing customers.

The following are the simple initiatives a small business can take towards retaining customers:

Be their support system: If you are a small business, you have a great opportunity to know your clients / customers personally. Give them individual attention and understand their specific needs, business requirements and feedback. If you make them feel important and valued, they will return the same gesture to you by sticking around.

Be responsive: the single most important key to retaining customers is to let them know that you hear what they have to say! Even a minor customer complaint or issue or feedback, if acknowledged immediately, helps the customer in developing the trust towards you and more importantly towards the brand.

Keep in touch: Make it a point to keep in touch with your customers / clients on a regular basis. If you don’t hear from them in a while, drop in an email asking if they are doing well. You can also send out periodical emails, newsletters, company/product updates on a regular basis to remind them of your presence.

Reward them: Reward your customers / clients for being committed to you. An annual discount, loyalty bonus, a public acknowledgement of your association with them, priority service, etc are all ways to give your customers more reasons to stay with you instead of wandering away.
Acquiring customers is important and a necessity for any business to grow but retaining the existing ones is critical for it to stabilize and have a higher return on investment.

Why Word Of Mouth Marketing is Credible

It is obvious that you would trust the opinion of people than going by the self-proclaiming advertisements. Even if you had to buy a new SIM card, you would rely on others opinions as to which service provider has better service, better network and practical plans. Why does WoM provide so much credibility which other marketing initiatives do not? Let’s consider the following points:

1. Trusted Source
WoM is more credible because one knows where the information is coming from. And that is more reliable than advertisements. If you are reading about a product on a personal blog of a friend, you are bound to take that opinion into consideration. You will think about it and remember it next time you see or read about that product. Thus WoM gets the benefit of more credibility. Also, in case of offline WoM, when a friend or a family member has an opinion about a consumer product, you are most likely to make that as your opinion too, especially if it’s a beauty product, a service, an expensive gadget etc.

2. User Generated Content
In case of online WoM, if you key in a product’s name in the search engine, you will see all sorts of results pop up. Some of these results will be user generated content that would have been posted by those who have experienced the brand or used the product. This content about the brand will be based on real experiences of the users and thus depict the reality. You will be inclined to believe these posts – be it on review sites, blogs or even consumer forums.

3. More Impactful
Since WoM involves real people passing on the information, it is far more impactful than what you read in the newspapers, magazines or the ads. Thus WoM beats any form of marketing. If you get some information from the first hand user of a product, it will have a greater impact on your opinion formation and purchase decision making.

4. General View
WoM is also more credible if more than just one person is of the same opinion about the product. If the similar kind of opinion is being passed onto you by a number of people, it is concluded that the opinion is the general view on the product or the brand and thus it is bound to be true. This makes WoM a far more credible source of information. When you learn that the general opinion about the product, by those who have used it, is negative, no advertisement will succeed in changing your opinion.

5. Bias
WoM is more credible since we are biased towards our family and friends. We trust their opinion and support their view out of our bias towards them. Whatever they tell us, we are most likely to empathize with that and become prejudiced towards products and brands even without using them ourselves. That’s why WoM is far more credible source of information than any advertising or marketing communication.

CSR for Internal Marketing

CSR can give the employees a sense of pride. They feel they are working with a responsible organization. A lot of organizations are now realizing the importance of internal marketing for higher employee retention and internal brand building. CSR comes as a great tool of internal marketing and employee development in the following ways:

1. Self Enhancement
CSR initiatives in an organization provide for self enhancement opportunities to employees that helps them with their personal and professional growth. They learn to be more sensitive towards the society along with displaying the attributes of being a responsible citizen. CSR initiatives can sensitize them to the growing societal concerns that demand attention. Employees appreciate that they get the opportunity to work towards these causes through their organization. As a result of this, they develop affinity and respect for their employers.

2. Work Life Integration
CSR initiatives help employees make meaningful integration between their work and life. It is observed that by indulging in socially responsible practices at work, employees find themselves capable of blending work and life seamlessly. While employees try to keep the two separate, it is practically impossible to do so. Although some employees might be interested in getting involved in social work, they may not find time and right space to do so. In such a scenario, if employers provide that much platform, it keeps the employees motivated. This is another way CSR can help the organizations in internal marketing.

3. Higher Self Perception
When employees get involved in socially responsible work, they develop a higher self-perception about themselves. When organizations enable them in these kinds of activities, their connection with the organization becomes stronger and goes beyond just employee-employer relationship which helps the organization in bringing the employees together and building a more profound internal team. This also goes a long way in keeping the employees motivated, as their respect for themselves goes up. They feel a sense of satisfaction by contributing to the society.

4. Internal Team Building
CSR initiatives can be a great team building tool as well. Organizations that take up activities and involve their employees directly in implementing them on field can succeed in making the initiative a team building exercise for the employees that brings them closer and helps develop informal groups within the organization. This can result in a congenial working environment and smoother work flow too. For eg, a field visit to the village which the organization had adopted or a trip to the school which the organization has established can bring the employees together to do something apart from the official work. Something as small as visit to a local NGO can help organizations in taking their internal marketing a step further.

5. Employee Needs
Certain CSR initiatives are focused towards employees of the organization. For eg, health camps for employees, relevant employee training and development, special activities for employee’s families, etc. These initiatives help the organization in fulfilling employee needs by way of CSR. These policies differ from one organization to another.

Corporate Social Responsibility – It’s Essential For Successful Marketing

Today marketing is not just about analyzing what the market demands and offering a suitable product to them, it goes much beyond that. It’s the age of Societal-Marketing, where social issues need to be given due importance to create a more meaningful relationship with the target market.

Today, investors, consumers, government and even media give more attention to companies that have a social bent. Off late, many brands have gained instant publicity with their CSR campaigns. However, many brands still fail to realize its significance early on and trudge towards it later. Following are the reasons why CSR is essential for all brands – big & small:

1.      Good for expanding/growth

Today individual and institutional investors prefer investing in companies that serve a social purpose along with its core business activity. This is so because they understand that the organizations that have a social bent have a higher success rate. Also, reasons like stricter legal rules with respect to carbon emission, etc have also led the investors to evaluate all the aspects of the companies before investing.

2.      Image building

A good CSR campaign, if carried out on a consistent level, leads to a positive image building for the company. A company who takes initiatives for the betterment of the society will be looked up to more than the company who isn’t. For e.g., Panasonic has been taking a lot of global initiatives to be known as a ‘green’ brand; this will definitely build a better image for Panasonic when compared to its competitors.

3.      Crisis Management

A CSR campaign may help in crisis management. Take the example of Bhopal Gas Tragedy. If, immediately after the tragedy, the company had launched a campaign for the rehabilitation of those affected, and shown sensitivity towards the victims, it could have done wonders to Union Carbide’s image. Another example can be of paper factories. An environmental campaign by them where in they could adopt towns and cities to plant more trees would do them a lot of help if the environmentalists raised questions on their usage of wood to make paper.

4.      Long term benefit

When business is small, the entrepreneurs think it’s not required of them to do social work. What they don’t realize is that the earlier they start, the better, because if they are involved in some sort of CSR activities, they get media attention which eventually pays off. Anyone can shell out resources when they are a big brand, doing something for the society even when the brand is small, that’s what makes for good story. Also, it helps you sell. Consider the example of a small organic products Indian brand called Rustic Art. Their products are completely handmade by rural women, providing them employment. Hence there’s a story behind every product they make and that helps them sell.

5.      Edge over competitors

It is but obvious that if a brand is more involved in the social issues, it will also be closer to the consumer’s heart. It is an easy way of differentiating from the competition.