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Performance & Growth

3 Ways To Stop Taking Your Most Loyal Customers For Granted

Do you know who your most devoted regulars are? Are you listening, Uber?

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ASTRSK founder and regular Uber user Elliot Tomaeno (who is, in fact, Uber’s most frequent rider) last year wrote to the ride-share giant an open letter detailing his disappointment at the lack of appreciation he said the company shows loyal customers.

In his communique, Tomaeno pointed out that the company hadn’t once thanked him – no postcards, no emails, no recognition of his “undying loyalty.”

He wasn’t just being nitpicky. According to L2 Research, 90 percent of customers surveyed, who participate in loyalty programs, said they wanted those companies to communicate with them regularly. As Tomaeno touched on in his letter, the message here is that a little personalised outreach helps turn regular clients into dedicated brand advocates who will actively spread the good word.

So consider: If you take your most devoted customers for granted, you’re losing an enormous opportunity. When it comes to driving sales, few things are more important than building loyalty.

Rewarding the regulars

Loyal clients keep coming back, providing steady revenue for a company. But what is the best approach to creating that loyalty?

Think about credit card companies. They offer reward points for signing up and more points if you spend a certain amount. Yet it’s not loyalty that keeps customers from closing their accounts. They know their credit scores will drop if they do, so an artificial block is in place that helps credit card companies retain customers. Points don’t instill a sense of loyalty in them, but negative consequences do.

On the flip side of the same coin, you have companies that seem to almost intentionally gouge their longtime clients. Is it any wonder that people seem to universally loathe their cable providers? Some major American cable companies are notorious for offering better packages at lower price points to new customers while forcing existing customers to pay more for less.

loyal-customers-in-business

Obviously, neither approach is going to build real loyalty. Here are three steps to strategically reward and retain your most loyal customers.

1Understand the complex value of each customer

One of my clients’ sales teams told me about a special factor they take into account before deciding how much to charge a particular client. It’s called the PIA, or “Pain in the Ass,” index. Basically, they’re making a value judgment about how much emotional distress certain clients are worth in the long run.

With the PIA index in mind, consider how longtime customers are likely already pretty satisfied and are therefore more enjoyable to work with. That’s what I’m talking about when I say you need to understand a customer’s true value, and not just in terms of dollars.

Sound simple? Many of the business leaders I know actually don’t understand what their best customers are really worth. Knowing the value of repeat customers versus that of new customers would help those leaders better tailor offers and loyalty initiatives for each. To assess this, yourself, keep metrics for every client, to see not only how much bottom-line revenue you make off each one, but also how many referrals each client sends your way.

At our company, we also measure the efficiency of our clients, in respect to time spent, and how they’ve treated our people in the past. The amount of emotional energy you have to sink into certain accounts may not make them worth your time, ultimately. As for the others: Let those who provide the greatest value know how much you appreciate them.

2Give them more than a punch card

Repeat-customer perks have long been part of the loyalty-building game. Historically, though, these benefits have been somewhat uninspired and generic. Is it such a prize to earn a free sandwich after purchasing 10?

To win your customers’ dollars and their hearts, get more creative with your incentives. Starbucks, for example, developed a highly personalised rewards programme. By partnering with outside companies, such as Lyft and Spotify, it provides frequent latte-sippers with unique perks beyond what its stores provide.

Most companies are missing out on this lucrative opportunity, as 89 percent of brands fail to tailor rewards to their customer base, according to Capgemini Consulting. Old-school discounts simply don’t work anymore. These days, only 47 percent of customers say that they’ll exchange their personal contact information for discounts, according to 352 Inc.’s Geoff Wilson; and that number can be expected to continue to drop.

So, segment your customers and build out a solid loyalty program that tailors rewards specifically to those individuals’ interests. Whether you allow them to earn points for each purchase or dollar spent, or offer exclusive promotions to clients who have been with you for a certain period of time, individualised rewards will make them feel great – and convince them to stick around.

3Show them the love – constantly

One of our clients, Build.com, sends regular emails to its customers that contain useful home-improvement tips. We see great engagement with this programme because when recipients see this content hit their inboxes they feel part of an exclusive club that shares insider information.

With the Rockefeller Corp. finding that 68 percent of customers leave because they feel companies don’t care about them, that kind of ongoing attention can have a huge impact.

When you provide valuable information in an episodic fashion, your customers will come to expect and anticipate the friendly correspondence. And the continuous stream of content will lead them back for more.

The truth is, people today are so bombarded with emails, text messages and targeted advertisements that it’s easy for yours to get lost in the noise. You have to make sure customers understand exactly what you’re offering and know that you’re aware of their allegiance to your product or service.

The formula is really pretty simple: Loyal customers translate into dependable revenue and future growth, but loyalty doesn’t develop magically. To earn it, you have to dig into the data and listen to your gut instincts to figure out the true value of each customer.

Then, to prove to your best customers that you understand their desires and interests, provide them with intriguing content and special personalized offers. Once you have their attention, continue to shower those loyal customers with appreciation.

I promise, they’ll pay it back with interest.

This article was originally posted here on Entrepreneur.com.

Erik Huberman is founder and CEO of Hawke Media, deemed by Built in LA as one of the "Top 50 Startups in L.A." and one of the "Top 10 Happy Places to Work" by Happy City. Hawke Media is a leading outsourced digital CMO agency and provides a full sales, marketing and ecommerce team without the overhead. As a serial entrepreneur and a brand and marketing consultant for eight years, Huberman previously founded, grew and sold Swag of the Month and grew Ellie.com's sales to 1 million in four months.

Performance & Growth

Proven Strategies To Grow Your Start-up On A Scale Following These Guidelines

The following strategies can help you make the start-up scalable and grow it to accommodate a larger demand.

Joseph Harisson

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Scalability and flexibility are important properties of any business. Let’s say you’ve managed to build a successful start-up. It’s profitable and promising, but you want it to become better. The scalability of a business involves its ability to adapt for bigger workloads without losing revenue.

Even if your business is currently small and doesn’t generate huge profits, scalability can help it turn into a large enterprise. The wrong approach to developing a start-up can deprive it of an opportunity to become better.

The following strategies can help you make the start-up scalable and grow it to accommodate a larger demand.

Scaling Vs Growth

Many companies make a mistake of thinking that scaling and growing a company is the same thing. In fact, growth involves increasing revenue or the size of the company (the number of employees, offices, clients).

Constant growth requires numerous resources and may not always lead to a proportional revenue increase. In many cases, the growing number of services or products needed to boost revenue involves high costs related to the growing number of employees and equipment.

On the other hand, scaling allows you to increase the revenue without the costs involved in growth. You can handle the extra load and boost your profits while keeping the costs to a minimum.

At some point, a successful start-up needs to make a choice between growing at a constant rate and switching to the scaling business model.

Even though a single clear method for scaling your business doesn’t exist, there are some guidelines you can follow.

Related: If You Want Scale, Fail Fast And Learn Quickly

1. Get Ready To Be Patient

Scaling is not a quick process so you have to be patient. The overnight success story is not about you. In fact, scaling too fast usually results in unfortunate failure.

Allow yourself to spend the time to understand who your ideal customers are and how you can solve their problems in a better manner. Make sure you understand how to be confident about the new volume of your work.

Do research to find out how you can find the right resources to achieve scaling rather than growth.

2. Choose The Right Software

The lack of time and team members is a common problem for a startup looking for scaling methods. That’s why they need to try and automate as many processes as possible. This can be done with the assistance of the right software.

  • Trello – to simplify in-office and remote teamwork
  • MailChimp – to improve marketing campaigns
  • Brand24 – to get insights about your business
  • Survicate – to collect customers’ feedback
  • Voiptime – to increase connectivity.

Enterprise SEO specialists at Miromind also recommend paying special attention to different programmes to help you with your marketing efforts. Many digital marketing tools available today are free.

3. Take Advantage of Outsourcing

Since you are hoping to limit the expenses while growing the revenue, you have to find ways to spend the revenue in the right manner. The biggest mistake made by business owners who think they are choosing scaling is hiring a big team. By doing so, they turn scaling into growing.

Your best bet to avoid hiring a large team and paying large salaries while achieving your plans is to outsource. Using your resources wisely involves finding freelancers and remote employees who are willing to work for a lower pay on a one-time (or several) contract bases.

For example, you don’t need a lawyer or a computer specialist sitting in the office all day long. Why should you pay them a monthly salary?

Related: What It Will Really Take For South Africa’s Businesses To Scale And Create Jobs

4. Don’t Do It Alone

Even though certain team minimisation is necessary to improve your scaling efforts, don’t try to handle everything on your own. It’s important to have at least one person you can rely on to manage the business-related problems.

Conclusion

Scaling your start-up is possible as soon as you understand what scaling is in detail. You need to be careful not to start growing your business instead of scaling it in the process. Once you have all the fundamentals figured, resources managed, and the right people in place, you are ready to start.

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Performance & Growth

Selling The Cape Town Lifestyle In China

GSB alumnus Grant Horsfield has built a rapidly expanding business in China that aims to provide a better lived environment – both at work and at play – and deliver a more balanced, sustainable and enjoyable lifestyle.

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When Grant Horsfield moved to Shanghai, shortly after completing his MBA at the GSB in 2004, he wanted to find a product to sell to China, when the rest of the world was focused on buying from China. “I had a clear purpose,” he says, “I wanted to import something from Africa and bring it to China – I just didn’t know what it was.”

Horsfield had completed the Doing Business in China elective on the MBA programme, taught by Professor Kobus Van der Wath, which led to him accepting a job in China with Van der Wath’s consulting firm – The Beijing Axis. He also completed an exchange programme at Jiao Tong University in Shanghai. During this time, although he found China to be exciting and full of opportunity, Horsfield missed the Capetonian lifestyle – particularly the outdoor life and the interaction with nature.

He says, “that was when I realised that the product China needed was the lifestyle that we have in South Africa. I was sure that if the Chinese knew what they didn’t know, they would be living a more balanced life and be able to appreciate and relax in nature – so that was what I really wanted to import to China, the Cape Town lifestyle.

“At that point there was no concept of a weekend getaway spent relaxing in nature that we are so used to in South Africa,” Horsfield explains. This realisation kickstarted his vision for Naked – a chain of boutique eco-resorts set in natural landscapes across China.

Related: Want To Start An Import Business – Here Are The Importing Terms And Documents Involved

The naked Group, which Horsfield founded in 2007, has built and now operates four luxury resorts with a further six under development. The first boutique resort, naked Home opened in Zhejiang Province in 2007, followed by naked Stables – an award-winning resort in Moganshan which offers horse riding to guests. Naked Stables is an industry pioneer in that it was the first resort in China to receive the prestigious Leadership in Energy and Environmental Design (LEED) Platinum certification – an American certification system encouraging the design of energy and resource-efficient buildings that are healthy to live in. Horsfield extended the concept of a luxurious retreat with the addition of naked Castle, a 95-room castle with two restaurants and a spa surrounded by lush forest, and naked Sail which offers a unique travel experience on a 70-foot catamaran in the Andaman Sea.

In 2015, the naked Group expanded into the co-working office space industry through naked Hub. Horsfield sees the move into office space as a natural extension of the naked brand.

“Essentially we had been inviting people to have a better lifestyle outside of work and we realised that we could do that in the work experience too,” he says. “When you build a resort, you build a space that allows people to experience a certain level of comfort and enjoy themselves, so why not do that in an office?” The naked team’s skillset in designing and building sustainable comfy resorts was easily transferred to building office spaces that people enjoy working in.

Naked Hub has seen rapid expansion, opening 50 hubs across China, Vietnam, Australia and the UK in just two and a half years. Initially based on smaller start-ups or freelancers in the gig economy, Naked Hub now caters to larger firms. “The idea of co-working space was born out of trying to make a more efficient smarter space for smaller companies but today more that 50% of our companies are multinationals,” says Horsfield.

The principles of a more balanced lifestyle and a cleaner more sustainable environment are present in all naked projects. For Horsfield, it’s all about trying to make the world a better place.

“No matter what kind of entrepreneur you are, you have to have some values that are important to you. For me, trying to change things for the better has been paramount in everything we’ve designed, and we probably have more sustainability experts on our payroll than most companies. What we do is not just about building, it’s about people, communities and how people interact in their environment.”

Commenting on what it takes to start a successful business in China, and then follow through with rapid global expansion, Horsfield says perseverance, a belief in what you want to achieve, and above all – courage – all play a role.

“You’ve got to have courage to do what looks very scary. If you don’t have a sound belief that it will work, then you just can’t do it.” He adds, laughing, “or as my mom says – I’m just too stupid to see the potential problems! But seriously, courage is what separates businesspeople from entrepreneurs – and that’s something that can’t be taught.”

Horsfield also believes strongly in what he terms AQ, or adversity quotient. “This is the mentality that allows me to overcome obstacles, the ability to hit a wall 20 times but pick myself up and keep on trying.”

Related: Meet The 40 Richest Self-Made Entrepreneurs On Earth

Looking back on his experience of the MBA, he believes the programme’s value lies in promoting self-knowledge and reflection. He says, “each project I did allowed me to examine what I had done before and to consider how I could have done things differently. Examining my strengths and weaknesses was a huge benefit. Today I don’t hire people who have low self-awareness.”

“The other wonderful thing about the MBA was the diversity of students. We had a mixed group internationally, with people from many different cultural and work backgrounds, that was really enlightening. It also gave me a strong network of likeminded people.”

Horsfield believes his South African upbringing and his education at the GSB certainly helped him on his entrepreneurial path. He says, “wanting to do some good in the world, wanting to change things for the better, is a uniquely South African strength.”

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Performance & Growth

What Are You Prepared To Lose?

While business growth tends to be a major goal for most business owners, with growth comes pain. Here’s how you navigate those challenges.

Ed Hatton

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Many, perhaps most entrepreneurs would like their businesses to grow — whether from ambition to create an empire or just to reduce the risks inherent in being a little business. To do so the entrepreneur has to change roles. They must move from where they can control everything, and change from working as they always have. Being human, we fear moving away from familiar routines, we find it hard to give up authority and we lie awake at night worrying if we can afford all those extra people.

When you run a small business you make all the decisions, you monitor performance of your employees, have direct contact with customers and have a small nest egg so you can still pay your people in bad months. A bigger business means higher overheads, more debtors, and additional inventory, all of which will put a strain on cash flow. You are likely to need more working capital to finance growth and may have to take a loan, which only adds to the risk.

You are also likely to have less day-to-day control over operations and will worry about whether your managers are about to commit an appalling blunder. A more insidious risk is the growing distance between you and customers as the business adds layers of sales managers, sales people, project managers, and branches.

Finding the opportunities

It’s difficult enough just to stand still in tough times, let alone grow strongly. The more difficult the competitive and economic situation becomes, the more we want to control every aspect of the business. We hesitate to fill vacancies, clamp down on expenses, get enraged when people make mistakes and push the sales team until they get nervous.

We develop a hang-in-there mentality and hope for better times. Paradoxically, tough times offer great growth opportunities. While others cut down on training and marketing, you have the opportunity to lure customers away from them with aggressive marketing and pricing. You can build a work environment that will attract the best people by offering strong customer support and good development opportunities. If you are bold, you have the opportunity to lock in the best suppliers by paying on time and signing long-term contracts while others delay payments and seek cheaper suppliers. It takes courage to do this, and you will feel the loss of security and comfort zones.

Related: 3 Ways To Promote Business Growth In A Troubled Economy

In this rapidly changing world, it may be easier to grow a business now than it has ever been. Businesses that embrace change and look for opportunities in uncertainty can scale rapidly. Disruptive technologies have changed the rules and allowed new businesses to grow to international giants. Waste — especially packaging waste — green energy, medical technology and urbanisation have all presented global opportunities for smart entrepreneurs.

Change is difficult to manage; we prefer our comfort zones, but treating change as a friend rather than a fear could give your business the growth spurt you desire.

Letting go to move forward

One of the hardest things to do as a business grows is to discard products, people and processes that have built your business to where it is today, but will be a hindrance to you as you grow. You may have a favourite product that was the essence of your start-up, but is now out of date and uncompetitive. Kill it.

There is pain in dealing with staff and suppliers who will not be able to keep up with your growth, especially those who stood by you when you needed them. I am all for loyalty, but if loyalty becomes a hindrance you must act. Be kind to them, give them their dignity rather than carrying them as a charitable favour. Change their roles, or find alternate work for them. Getting rid of encumbrances, products, people, suppliers, customers and processes is all part of what you need to do to take your business into a growth phase.

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