Many businesses make the mistake of believing social media are tools to win new customers. It’s certainly possible to win new business and new accounts with social media, but the focus of their use should be on building customer loyalty and engagement.
If you carry out some simple analysis in relation to a customer and the business they give you, you may be surprised at what you learn. For most businesses, the cost of acquiring a new customer is far greater than that of retaining an existing one. A term some marketers use is the ‘lifetime value’ of a customer. Their initial order may only be worth a hundred pounds to you, but if you look after them and develop a relationship with them, they could be worth thousands of pounds to you. Social media are the perfect way to build relationships with your customers. They are also great tools to keep competitors at bay.
If a customer trusts you and is happy with your products and services they are likely to stat with you. The only possible exception is the type of customer who is constantly looking for a better deal, and will move to a new supplier for a cheaper price. In the long run, these customers may not be worth the effort or cost of dealing with.
Using social media to communicate with and engage your customers is an efficient and cost effective way to build loyalty. In certain industries, you can establish yourself as an expert by using social media. If you can achieve this, customers won’t even consider looking elsewhere. In other industries, the fast pace of change means you need a constant dialogue with your customers, and the likes of Twitter and Facebook are perfect for this.
The following are three example of different types of businesses and how they might build customer loyalty using social media.
An Insurance Broker.
Using Facebook and a customer email database, the broker could communicate news and updates relevant to customers’ insurances. For example, as winter approaches there are precautions a customer should take to protect their home. A change in the law could mean the customer needs to update their auto insurance. The broker’s Facebook page would become a source of advice and expertise the customer returns to. When it comes to renewal of their policies, the customer is less likely to move away from this broker offering free advice throughout the year.
A Specialist Cycling Shop.
The shop owner could use Twitter to send news about cycling events around the world, such as The Tour De France. In between these messages, the owner could send brief updates on new products of interest to cycling enthusiasts. As well as building customer loyalty, the shop could attract additional sales by this regular customer contact.
A Pizza Restaurant.
Facebook could be used to offer discount coupons to customers. Flyers in the restaurant could entice customers to sign up to the restaurant’s Facebook page to hear about these offers. There are many different ways this could work in practice, but a very simple way would be to communicate a word the customers must say when placing an order. This simple system could be used to attract customers back to the restaurant over and over again.
Using social media for marketing doesn’t have to be complicated. Think about the ideas above and how they might be used to build customer loyalty in your own business.