Loyalty is a recipe for growth

In an age of digital discovery and social media, here’s something that more and more local businesses are learning: Existing customers can be one of the most powerful growth engines ever. One way to put this engine to work is to identify and harness the hidden marketing potential in your “rock star” customers.
But watch out: they might not be the ones you think. For example, they aren’t necessarily the biggest spenders or most loyal. Loyal customers don’t always promote you (in fact, it’s likely they’re not), while big-spending customers may not be profitable or have a good story to tell.
So who are your rock stars? Bill Lee, CEO of an educational organization called the Customer Reference Forum, says your rock stars are simply the ones with the biggest potential to promote your business and influence others. “First, they’re loyal – that’s the price of admission,” said Lee. “They have a good story to tell about how your product or service helps them. Second, they’re eager to tell it. Third, they have access – and want to gain more access – to influential networks that contain more buyers like them. And fourth, they want to build their reputation and influence in such networks.”
But as much as they might love you, these rock-star customers won’t help grow your business on their own. Even customers who identify themselves as “promoters” in customer surveys – saying they’d be highly likely to refer you to a colleague or friend – aren’t actually doing so. Studies have shown that only about 10 percent of self-described promoters actually refer profitable new customers. The key is this: You have to take the initiative and make it easy for them to do so.
To make it work, it has to be all about them – not about you, says Lee, who is also author of a book called “The Hidden Wealth of Customers.”
One tactic that works with rock stars is community marketing that recognizes how people buy things locally, from a refrigerator or flat-screen TV, to a new roof or a doctor’s services. In that context, most people aren’t likely to seek out a salesperson or collect brochures. Instead, they’ll talk to friends, neighbors, colleagues or other peers to find out what or whom they’re using. Perhaps the best thing about rock-star customers is that they already exist, quietly thriving under the radar, waiting for you to discover them and put them to work. Failing to do so is a little like being a homeowner who knows a stash of gold is hidden in the wall but never uses a metal detector to find it. •

Daniel Kehrer can be reached at editor@bizbest.com.

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