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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

You Too Can Grow A Successful Subscription Company. Here’s How

Dog toys? Baby stuff? Puzzles? Makeup? How can you think ‘outside the box’?

Matthew Gallagher

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Subscription companies have a unique opportunity to connect with their customers. By offering a recurring product, they get multiple chances to interact. Products range from razors like those sold by Dollar Shave Club to wristwatches like the ones we offer at my company, Watch Gang. Then there’s BarkBox, which treats your dog to a monthly shipment of toys and treats. These companies are vastly different but share a common goal: Curating a high-value experience for members.

Thousands of businesses have adopted the subscription model. We’re seeing new companies launching all the time, in every niche, from Sock Work, which sends monthly socks and donates some of its revenues to veterans, to iFind Seekers, sending monthly puzzles.

What may be surprising to some is that businesses offering a recurring product have been around since the dawn of commerce: The Romans sold and delivered food and newspapers on a repeating schedule 2,000 years ago. In this country, weekly milk deliveries were common even before the Constitution was written.

Related: Dr Greg Fisher’s 5 Key Principles For Executing Your Growth-Driven Strategy

Interested in establishing a subscription business for your product? In my experience, I’ve come to recognise what I call the “five pillars” for the foundation of a successful and sustainable subscription business. Those pillars – community, value, discovery, service and integrity – are exactly what you should focus on:

Pillar 1: A thriving community

Having a community of enthusiasts speaks volumes about your company. It’s a sign of trust and brand affinity, and proof that people are genuinely interested in what you have to offer. They are willing to share their experience with others.

Your community is a trusted group of peers who are more than ready to authenticate a product, provide feedback on the service and help create a sense of belonging for like-minded members.

Your community drives your business forward, motivates you to improve and helps you craft service improvements. You have to be dedicated to growing and nurturing your community, because ultimately it is the backbone of your business.

Pillar 2: The delivery of value

Consider this: Why would customers want to “set it and forget it” when they can just order when it’s convenient for them? Why would they agree to a recurring payment every month for your service? The answer is value.

People have to get a product far more valuable than what they are paying for, which means you as the company founder have to go above and beyond to deliver added value.

Watch Gang, for instance, has price levels to fit all budgets, from $29 to $999 a month, and the watches members receive have a value that’s higher than their membership fee. At Barkbox, a $20 box is valued at over $40. Bluum, which offers a box containing the best-reviewed baby, toddler and mom products, has a monthly subscription fee of $34 with the box’s guaranteed retail value at $45. These are tangible savings, and for customers they provide convenience.

Related: How You Can Over-Deliver To Gain The Advantage

Apparently, customers agree. A Gang member recently sent a testimonial that stated, “My Watch Gang subscription is the only bill I actually look forward to paying every month.” A bill that’s welcome? This tells me that we have honored our commitment to delivering value.

Pillar 3: Opportunities for discovery

Subscription companies need to serve as a point of discovery. One of the reasons why subscription businesses continue to be so successful is because of the element of surprise — people love to open a box without knowing what’s inside. Subscription boxes give members the opportunity to discover new brands and styles.

Companies today are engaging members beyond just the monthly shipment. Birchbox offers loyalty points and money back for purchasing the full-size version of samples. At Watch Gang, we launched the “Wheel of Watches,” where members can spin a virtual wheel full of watches they may be interested in.

Related: Elon Musk’s Formula For Successfully Growing Companies Faster

They earn points to apply to the wheel every month they remain a member. This has become one of the biggest draws at Watch Gang, because it provides an entirely new kind of discovery experience – and it’s fun.

Pillar 4: Amazing customer service

While not a subscription box, Zappos has repeatedly been recognised as a shining example of how to treat customers. The often forgotten, but arguably crucial, benefit you can provide to a member of a subscription company (or any company) is world-class customer service.

Of course it’s easier and cheaper to outsource customer service or offer email-only support to cut costs. But you have to remember that every call, every customer and every situation is unique. Your customers deserve exceptional service from real people whom you’ve empowered to solve their problems.

Some of the most important changes your company can make may revolve around your customer service department. A single phone call can have immense impact. Having a well-trained customer service team gives your company the opportunity to learn from valuable feedback.

It’s crucial to give your team members a voice in your business and encourage them to share what customers are saying, both positive and negative. These team members are on the front lines with your customers every day, so they need to be adequately supported and compensated.

Pillar 5: A high standard of integrity

Without a sincere commitment to the above four pillars, your subscription business may never be profitable or sustainable. That’s why maintaining a high standard of integrity means you put people over profit. You need to take a stand to help your customers and deliver on your promises – even when that might cost you.

Every time a customer reaches out for support, you have an opportunity to demonstrate your integrity. It’s not an opportunity to make more money from the customer or even to deter him or her from canceling. It’s an opportunity for you to shine, as a beacon of good morals.

Set an example for all your employees and team members from the top, and it will trickle down to all day-to-day dealings within your company – with your customers, with your shareholders and with the public at large.

Today, anyone can launch a subscription business and start selling memberships; however, the businesses that will stand the test of time and truly become successful are those built with a solid foundation using these five pillars.

Related: 4 Ways To Make Your Business More Authentic And Successful

Investing time and resources into these five areas will help you not only grow quickly but also stand out as a company committed to taking care of its customers and employees.

This article was originally posted here on Entrepreneur.com.

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Performance & Growth

Are You Prepared To Listen To Your Board Of Directors?

If you want to drive growth in your organisation, you need to listen to your board at critical junctions.

Carl Bates

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In speaking with shareholder-managers about creating a board of directors, at some point the most critical question of all raises its head. “At the end of the day, will you actually listen to them?” Having a board of directors is a great driver of profitability and performance as we have traversed in previous articles. However, if you are not prepared to listen to them you will not receive the value from having them there.

Listening at critical moments

It can be very easy to respond to this challenging question by saying, “Of course I would listen to them.” In practice, it can be a much harder reality.

More specifically, it can be one thing listening to your board when you like what they have to say, and another thing entirely when you disagree or do not like what you are having to hear. When your board is challenging you, making you feel uncomfortable or suggesting you are going down the wrong path, this is the time to sit up and take notice.

Related: Scale Your Values To Scale Your Business

Being the shareholder-manager and the entrepreneur means having to take a step back and take account of what others are saying. It can be an interesting change. I am sure that on your entrepreneurial journey you, as have I, have occupied that comfort zone of “what I say goes.” In the boardroom though, the last thing you want your non-executive directors to do is to turn-off because of the way you respond.

Do not avoid the tough discussions

As a non-executive director, I am not one who avoids the tough discussions. In a board meeting I once chaired, the board felt that whatever we asked or said about a particular issue we were told we did not know the context or management explained how much work had already been done. It was as though the entrepreneur had decided what was happening and did not want the board to get in the way.

The project in question was at an early stage and while it was a good idea it was going to require guidance and critique to support its success. The discussion got to the point where I turned to the shareholder-manager and asked, “What questions are we actually allowed to ask?” It was in a slightly heated tone, I will admit.

There were a few moments of silence while the room took stock. The point was made and management relaxed a bit. We then worked through the issues as a team. The entrepreneur still refers to that discussion and the fact that if he is not prepared to hear the board, then what is the point of having a board.

Related: Relax Spas Founder Noli Mini Shares Her Insights On Building A Business Of Value

It takes two to tango

If you are not getting this sort of level of challenge and debate, it may not only be your fault as the entrepreneur. It may not be because you have shut down conversations or stopped lines of questioning you have not liked. It could be because you do not have directors who are naturally challenging enough. If you have a board of directors, including independent non-executive directors, my question for you is, “When was your last tough discussion?” If this is a difficult question to answer then you should ask yourself, “Has my board turned off the tough discussions because of how

I respond?” or “Do I need to find non-executives who are really willing and able to challenge me?”

Building a high-performance board is a journey, not a destination. It is critical that you have the right people around the table to tango with you.

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Performance & Growth

7 Ways To Leapfrog Your Business From 0 To 1

Here are some of the ways I have leapfrogged my business, Mann Made, alongside relevant examples.

Mic Mann

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Entrepreneurs should always be asking themselves, “How can I use technology to scale my business faster?” There are a number of ways to do this to move ahead of your competition and leapfrog your business into the future, as detailed in Peter Thiel’s book Zero to One and Salim Ismail’s Exponential Organisations, which I recommend every entrepreneur read.

Here are some of the ways I have leapfrogged my business, Mann Made, alongside relevant examples.

1. Utilise already available Tech Stacks

You can scale your business in an exponential way by using various internal and external tech stacks that are free or available at a low cost. Just think of the iPhone. When it first launched, it did not use a single piece of new technology. It was manufactured using pre-existing technologies. It was more a case of how Apple packaged these technologies together that created the iPhone’s unique user experience and ecosystem. It illustrates that you don’t always have to reinvent the wheel, you can use pre-existing technologies to help your business get ahead. In this way, you’ll have more time to focus on other more important elements of the business, which will allow you to scale faster.

Related: Breaking Office Walls With Augmented And Virtual Reality

Use project management software tools and digital dashboards to help you assess the financial health of your business in real time by means of a digital timeline. They can comprehensively outline your expenses and sales drivers, provide an overview of your previous, current and projected sales, and illustrate further ways in which you can streamline various business processes. These should be implemented across your business, alongside time-tracking software, such as Toggl, and project management software, such as Asana, both of which we use at Mann Made. Choose whichever tech stacks suit the structure of your business and will help you scale and automate quicker.

Also think of shortcuts. Mandrill by MailChimp is an email marketing platform that provides in-depth analytics and tracking options. Using plugins on your website or inbox means you don’t have to create your own email software. By combining multiple programming languages, software services and online products, you can rely on external servers and databases to make your own tech stack.

2. Leverage assets, products and services you don’t own

Uber and Taxify don’t own any cars, Airbnb and AfriStay don’t own any properties, social media platforms don’t create any content. Each of these businesses leverage assets they don’t own. And you can do the same.

In the digital realm, you need to be able to scale up your systems, servers and output really quickly to ensure your website doesn’t crash during peak periods. Make sure you use the big guys – those with a reliable reputation, proven track record and 24/7 support – for domain and website hosting as well as cloud storage.

3. Crowdsourcing through the gig economy

Similarly, leverage freelancers and contractors through the gig economy. This is one of the ways in which the future of work will be defined in the coming years. “No matter who you are, most of the smartest people work for someone else,” according to Bill Joy, co-founder of Sun Microsystems. By using the power of the crowd and the collective, you can source solutions beyond your employed work force. Look to OfferZen, Flexy, Fiverr, Supplier swop for on-demand work forces, as well as The Resource and I Know a Guy Facebook groups.

The gig economy allows you to call up trusted and proven freelancers and contractors as and when you need them. It doesn’t leave you with the financial burden of keeping them onboard when you don’t have projects for them to do. Have systems in place so that the training required for on-demand staff is minimal or has been briefed ahead of time using training materials, so once the project is briefed they can hit the road running.

NetFlorist is the perfect South African example, they scale up really quickly during their peak periods and don’t have to bear the costs during the quiet times when it’s business as usual.

4. Create an ownership mindset

You won’t have to micro manage your staff if you hire the right people. Make performance-based individuals – those who are self-motivated to grow without the need for external input – part of your core team. Give your employees more autonomy and decision-making power. Allow them to have creative ownership of the projects they’re working on. This will help them to thrive in the work environment and will ensure optimal results. That’s exactly what we try to do at Mann Made and have found that people rise to the occasion and take accountability for their projects with exceptional pride.

5. Expand your network and community

In 2011 software engineer Marc Andreessen said that software is eating the world. And it’s true that in the coming years, all businesses, not just internet companies, will become digitised and will run on software.

In 2018, networks are eating the world. By leveraging the network effect, you can create a strong system and support base of likeminded entrepreneurs in the same or similar industries, as well as future business opportunities.

The best way to do this is to attend industry related-events, conferences, indabas and award ceremonies – find those by browsing B2B websites and industry calendar listing, such as BizCommunity. Attend relevant alumni events hosted by your university, a local business school, or sign up for webinars hosted by international business schools. Expand your network by joining local community pages and groups, try LinkedIn, meetup.com, Facebook, as well as open-source communities to share ideas and collaborate on projects. The SingularityU South Africa Summit has a number of chapter events about exponential technologies happening throughout the year in Cape Town and Johannesburg.

More importantly – offer advice and personal learnings on these various platforms, be engaged and answer questions freely, so that you are seen as an industry leader. Accept invitations to exclusive and invite-only industry related events and conferences. Also be sure to share information and key learnings with your audience on social media. And remember to be relevant.

Related: How To Embrace An Exponential Mindset For Your Business

6. Learn from the future

In the past, we were taught in quite rigid ways; these days there are multiple teachers and numerous credible sources of information. Subscribe to newsletters from quality websites and blogs that are linked to your line of business, join online courses, participate in MOOCs (Massive Open Online Courses) that are offered through various universities. Have a look at the free introductory course to understanding exponential technologies offered by Singularity University. You can’t evolve to the next level – as a human and an entrepreneur – if you’re not updating your knowledge base and keeping up with industry trends. Watch pertinent lectures on YouTube and presentations on TEDTalks, increase your emotional intelligence by watching The School of Life – each of these will help you become a more agile leader and understand your work force better.

My goal for 2018 is to do at least three online courses – in electronics, programming and in Blockchain. Never stop learning!

7. Experiment with iteration

Jeff Bizos rates the success of Amazon not based on earnings, but on the amount of research and development they are undertaking. Of course, it’s much easier for multi-billion-dollar companies to pump billions of dollars into R&D, but much harder if you’re still starting out or at the stage of trying to grow your business.

Supercell, the mobile gaming company that developed Clash of the Clans, has an entire department that develops, trials and kills games. Progress is all about experimentation. While it’s important to develop new products and services, it’s equally important to trial them, get constructive feedback from your target audience, redevelop, trial for a second and third time and, at times, learn how to bury unsuccessful projects. This process will help you to minimise the risks involved in R&D.

At Mann Made we’re always willing to try new things – and fail. We established a music record label that folded, tried our hand at advert gaming in the early days of internet adoption in South Africa, and created a content-sharing platform in 2005, the same year that YouTube was launched.

Through these trial and error projects we learned the importance of asking – our internal or external project managers – to create a minimum viable product that was not as expensive as the final product, but could be used to test and receive sufficient feedback from our target audience. This process would give us an indication of whether it was worth investing further.

I encourage you to fail in your business from time to time as ‘fail’ merely stands for F- first, A- attempt, I – in, L – learning, and that’s the only way you’ll get your business to thrive.

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