It is not hard to comprehend that customers are the backbone of any successful business. They are the core reason for any business to exist. All the business processes that you implement towards your company’s growth don’t mean a thing if your customer base is not growing. Customers can eithe
It is not hard to comprehend that customers are the backbone of any successful business. They are the core reason for any business to exist. All the business processes that you implement towards your company’s growth don’t mean a thing if your customer base is not growing. Customers can either stop your business or take it to the greater heights.
Business owners have been pondering on this concern for ages – how to grow the customer base. Adding more customers to a business has always been a matter of providing value. The more value you provide to the customers, the more likely they are going to stay or join your business. You need to be in constant touch with both your potential and existing customers. Time and time again, the value of your product must be demonstrated for them to constantly realize its importance.
But this is just a glimpse of it. There’s more to how you can build your customer base and we are going to look into that in a moment.
Growth in the customer base can be understood in two ways. First, the growth in the number of customers and second, the growth in the revenues from those customers. Although they are directly proportional to each other, the amount of impact they have in your business is different. For example, you can keep expanding your customer base by acquiring ten customers paying you $10k annually or you can acquire a high value single customer who pays you $200k annually. Naturally, it is more beneficial to go after the latter.
The business strategies in both cases are different. For acquiring, you are fully dependent on your sales and marketing team but for serving your high-value customer ($200K/annum) you need a state-of-art service. You need to invest in their success which ultimately leads to your own success. The strategy is usually termed as “land and expand” wherein you start small with a customer and later expand your business with them. You start with your primary product on a basic plan and eventually upgrade it to a higher paying plan along with upsells and cross-sells.
For a holistic growth of your business, you need to consider both – the volume and large enterprise customers. The value you can draw from large enterprise customers can even help you reach a net negative churn wherein you continue to grow your revenue even without acquiring new customers.
The way customer base definition differs from any customer group is that it is the group of customers who are your repeat buyers. These are the people who constantly add financial value to your business. Naturally, to grow your business, you need more of such customers to continue doing business with you. Below are a few ways you can follow towards the same.
When you are building a product for the market, it is paramount that you know your target audience. You must know what industry they come from, what are their challenges and pain points. Their needs must be clearly defined before you can place your product as a solution for them. You will be in a position to customize your solution when you know what goals they are trying to achieve. You must not only help them achieve those goals but also accelerate them towards the same.
For a vigorous growth of your business you need to act in parallel in two directions. You need to acquire new customers along with implementing the ways to retain existing ones. If you are into SaaS industry then you would know that it is getting increasingly difficult to retain the customers. Since, the switching cost is low, customers don’t give you a second chance if you miss out anywhere. There has to be a fine balance between how many customers you can acquire and retain at the same time. For the retention part, the next point will make it clearer.
Customer success is the upcoming business function that specifically deals with customer retention. It is not just beneficial to increase your customer base but it also helps generate further revenues from them. Furthermore, it has been repeatedly realized in the SaaS industry that retaining an existing customer is five times cheaper than acquiring a new one.
Most companies recover their customer acquisition cost within the first ten to twelve months. So, if you don’t invest in their retention, most likely you would be on a downward spiral. It is as important to seal the leakages in your customer base as it is to grow it.
Great customer service can be the most valuable differentiator from your competitors. By doing this, you are not only keeping your existing customers satisfied but also promote your brand as customer-centric. Social media is a good platform where customers can quickly raise their queries. Be prompt in responding to them because it generates a lot of publicity for your brand. Other prospects can see how you interact with your existing customers and resolve their issues. Keeping an omnichannel support is a key to facilitate your customer engagement and promote your brand.
Your niche of business must be having complementary products to yours that others are selling. They are not necessarily your competitors but you can collaborate with them. It gives a customer a wider range of products to buy. You must partner with such businesses because it allows you to reach a new segment of target audience. And in return, you can do the same for them. There has to be an agreement between the partners for the customers they send to each other. Sometimes it takes the shape of affiliate marketing which is also a viable option for many businesses to consider.
Growing your customer base is a long and patient process. You need to be consistent in your offerings. Satisfied customers lead to other customers and it takes years for building those satisfied customers. And even more time for turning them into your loyal customers or brand advocates.14
This is the most organic way of growing your customer base and has been most effective since earlier times. Other methods would give you temporary success but what remains, in the end, is the amount of credibility you have been able to fetch from your customers. The long-term growth of your customer relationship is at the core of this process. And since there is a human element involved here, it needs a lot of nurturing and consistent efforts towards building a greater asset for your brand.
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