Customer Loyalty – Dutch Uncles

What are Key Performance Indicators: A Basic Guide

Roopali Kotwal — Sat, 22 May 2021 05:35:04 +0000

Have you ever thought about what sets a good start-up apart from a great start-up? Well, the difference starts with the ways of working of the business in a start-up. It is true that a performance management system should be in place for an individual in an organisation so is it for the organisation itself irrespective of the fact that the organisation is large or small. In the context of a start-up, the progress of performance of the start-ups shall be measured and tracked by the KPIs that must be set at its early stage. The ‘measurement of outcomes of activities performed’ in a start-up is very important. The ability to analyse and understand the performance indicators of a start-up shall define the success of the start-up. Also, it will play a crucial role in converting a good start-up into a great one.

KPIs: Full form & Meaning

KPIs is abbreviated for Key Performance Indicators. Key Performance Indicators (KPIs), Key Success Indicators (KSIs), Business Metrics or Key Business Performance Metrics, these terms are used interchangeably and they serve the same role i.e. to track and measure the overall health and performance of a company.

‘‘

The ability to analyse and understand the performance indicators of a start-up shall define the success of the start-up. And, it will play a crucial role in converting a good start-up into a great one.

KPIs: What is their role and why are they required?

KPIs help to identify problem areas and measure the performance of the business. KPIs constructed well, provide management and potential investors an analytical snapshot of the state or we can see the overall condition of the company.

KPIs track the revenue (average profit, total revenue and new customer revenue), employment statistics (i.e. employee turnover and employee performance), marketing effectiveness like sales generation, efficiency and performance of an individual (employee or his/her manager), processes/departments and therefore performance of the company as a whole.

KPIs vs KRAs

Read the abbreviations aloud! And, yes, read them again. People often get confused between these two terms: KPIs (Key Performance Indicators) and KRAs (Key Responsibility or Result Areas). Both KPIs and KRAs measure and track the performance of the business. However, they both are different and yet important. They are different approaches to meet the business goals and objectives.

‘‘

KPIs work like a compass. They keep a track of the business if it is headed in the right direction or not.

How do you identify the KPIs that are relevant for your start-up?

Here are the key stages or steps to identify or choose the right or correct KPIs for a start-up business:

Select and review the KPIs that align and directly contribute to the business objectives
The selected KPIs shall meet the criteria of a good KPI. Ask yourself the below questions and, If the answer to most of the questions is ‘No’, you may need to change or replace these with new and more relevant KPIs:
- If the chosen KPIs can be easily quantified?
- Will they drive the change you want to see?
- Are the KPIs achievable, actionable? Could they be measured in a timely and accurate manner?
- Do these KPIs contribute to different prospects like customer, financial, internal process, learning and growth?
- Will these KPIs be relevant in the future?
Set short and long term KPIs
Share the KPI with the stakeholders and assign the responsibility for each KPI
Analyse and Evaluate current performance
Review of KPIs on periodic intervals i.e. may be weekly, monthly or quarterly basis

After reviewing the progress, you may need to evolve the KPIs. Hence, keep a flexible approach to review and readjust the KPIs if needed.

KPIs: What are the types and list of KPIs in a start-up?

Different areas or departments in a business such as sales, customer retention, cost of customer acquisition, cash flow, conversation rate, employee engagement, employee satisfaction, profit margin, website traffic, employee productivity, inventory Size can be analyzed by various kinds of KPIs. However, depending on the type of business, KPIs selection in a start-up may be different. Let us take a look at some of the key metrics or KPIs in a start-up business:

Active Users or Monthly Active Users (MAU)

Companies with apps and online games or social networking sites, use Monthly Active Users as a KPI to count the number of unique users who visit their company website on a monthly basis. Websites recognise MAU by identifying users’ contact number, email address and username.

Customer Churn Rate (CCR)

CCR means percentage of customers lost during a given or specific period i.e. they have stopped making purchases or unsubscribed from company services. Low churn means current customers are happy and believe that the product provided by the company is solving a problem. For SaaS or mobile Apps, a churned customer is one who cancels their subscription. And for e-commerce, churn rate means customers who fail or do-not make a repeat purchase within an average time frame. That period may vary from 90-120 days.

Customer Lifetime Value or Lifetime Value (LTV)

LTV represents the total revenue or an estimate of the revenue a customer will bring in or spend in your business or on your product or services during their lifetime.

Customer Acquisition Cost (CAC)

With CAC, a start-up can gauge how much they are spending on acquiring each customer. It reflects the money spent on marketing and salaries. CAC and LTV combination is frequently used to compare metrics particularly for SaaS companies.

Gross Merchandise volume (GMV)

GMV is the term used in online retailing business. It denotes the total monetary value of the sales for the merchandise sold through a specific marketplace over a certain period of time.

Gross Profit Margin (GPM)

GPM is the percentage of revenue that is actual profit before adjusting the operating cost such as marketing, overhead and salaries. GPM is determined by revenue and cost of goods sold (COGS).

First Time Response (FRT)

FTR is the difference between the time elapsed between a customer raising a ticket for a service or an issue/problem and an agent’s or customer support staff’s first response to it. Mostly average first response time is measured in business hours unless the customer support is open 24/7.

Revenue Churn Rate (RCR)

RCR is the percentage of the revenue lost in a given period of time due to cancellation or any downgrades. SaaS companies measure this KPI as monthly recurring revenue (MMR) churn.

Monthly Recurring Revenue (MRR)

MRR is one of the most important KPIs for a company that is selling subscriptions. Every new customer addition means a certain amount of money a company will earn every month provided the customer stays as a client. This metrics shows the profitability of a company as well as predicts the expected revenue for the following month.

Revenue Growth Rate

Revenue growth rate measures the month-over-month percentage increase in revenue. It indicates how quickly a start-up is growing.

Conversion Rate

Conversion Rate measures the success of any marketing campaign. Conversion rate calculates the percentage of the number of visitors who take a desired action or complete a goal on your company website. The higher conversion rate reflects the successful marketing campaigns.

Lead Conversion Rate – This is one of the most important top-of-the-funnel conversion metrics. Lead conversion rate is the percentage of visitors who arrive at the company website and are captured as ‘leads’. It indicates the ability of an organisation to attract the right target audience.

Activation Rate – It measures the percentage of people who successfully complete a definite milestone in the company’s on-boarding process. A milestone may vary as per the company business. For instance, a social platform may track the percentage of users who add the first friend in their friend list. Similarly, a music-streaming application may track the number of users creating their first playlist.

Average Revenue Per User or Average Revenue Per Unit (ARPU)

ARPU measures the revenue generated per user/customer or per unit. The term is mostly used by companies that offer subscription services to clients. For instance, internet service providers or telephone service providers.

Conclusion

KPIs work like a compass. They keep a track of the business if it is headed in the right direction or not. What works for a start-up and what doesn’t, can be clearly indicated by tracking the KPIs regularly to avoid repeated mistakes in any business. Key Performance Indicators (KPIs) or Business Metrics as stated above could be classified in various categories such as People Metrics, Customer Metrics and Financial Metrics. However, all these metrics shall comfort the start-ups to know the cause of poor performance, failure, success and results of the action performed and know the improvement areas.

The stated business metrics or KPIs are useful for start-ups in its various stages. However, to be a successful entrepreneur it is vital to narrow down to choose the right KPIs and prioritize them as per the need/growth of the company. Keep it very simple to select the KPIs i.e. make it easy to understand the performance indicators and choose SMART Key Performance Indicators i.e. KPIs that are specific, measurable, attainable/achievable, realistic and time-bound.

The post What are Key Performance Indicators: A Basic Guide appeared first on Dutch Uncles.

Demand Forecasting 101: Meaning, Types and Methods

Tanisha Achrekar — Thu, 29 Apr 2021 05:35:05 +0000

In grocery stores, you might have observed that some products are available in more quantity than others. The store owner would have more of some biscuit packets and barely a few or none of the others. Even from the manufacturer’s end, some products are manufactured more than others. Why would manufacturers, suppliers, or store owners keep/produce more stock of some products and less of others? The reason behind their actions is simply an estimated demand. The grocery store owner observes his usual sales and estimates which products are going to be sold more and which less. Then according to the estimated demand, he places the order to his supplier. The grocery owner here, without even realizing, conducted the process of demand forecasting.

Defining and understanding demand forecasting

Demand forecasting is a technique of estimating the demand of consumers for a product or service in future. Historic sales along with other information are taken into consideration while forecasting the demand for a product or service. A demand forecasting process gives a business the valuable information needed in order to understand the current consumers and potential consumers. This analysis helps the business to create a pricing strategy, marketing analysis, production along with other critical business decisions.

‘‘

If your business is new, active demand forecasting seems the perfect fit for you.

Types of demand forecasting

Depending on your business, there are several ways to conduct demand forecasting. Every forecasting will give you a different result. If resources and time permit, using multiple forecasting helps a lot to understand the consumer demand better. As it will help you in understanding the difference in predictions and the reason behind it.

Active demand forecasting

If your business is new, active demand forecasting seems the perfect fit for you. Active forecasting is where demand is derived based on external factors. This is because since the business is new, there is barely some or no internal information available to analyze. Instead during active forecasting, the focus lies on marketing campaigns, expansion plans, and marketing research.

Passive demand forecasting

Passive demand forecasting is the smoothest and easiest way of forecasting for your business. This is because the sales from the past are used to predict the future sales of the product/service. Also, there are no statistical methods or economic trends that are needed to be studied for this type. It is completely data-driven. The key here is to have tangible and reliable data that you can use. The more reliable your data is the more accurate your demand estimation will be. However, during passive forecasting, the underlying assumption is that your sales will remain the same as last year approximately. Hence, it is a great model for a business that is doing good sales and plans to continue that. This forecasting is more focused on maintaining the existing stability rather than growth.

Internal demand forecasting

Internal demand forecasting helps in understanding that even though the consumers demand increases, is the business capable enough to handle it? Does it have enough resources to meet those demands? Internal forecasting helps in understanding how the operations are going and their existing capability. It helps in understanding what is working for the business and what isn’t. One of the parameters taken into consideration during internal estimation of demand is profit margins, finances of the business, working capital, and supply chain operations. The reason why finances form the basis of this forecasting is to understand does the business have enough funds and resources to meet consumer demand.

External macro forecasting

What is happening in the industry, the market or the overall economy is taken into consideration during the external macro forecasting. It focuses on the external massive factors. The forecasting helps in understanding how the macro external factors are going to impact the consumer demand of your business. A simple example is how the COVID-19 pandemic, an external factor affected the demand of several businesses. Taking external market forces into consideration is essential as even though your business may be ready to expand, sometimes the time just may not be right. Also, these external parameters usually do have a direct impact on raw materials availability and other factors in the supply chain funnel too.

Short term analysis

Short term demand forecasting is basically to understand the demand for your goods or services in the next three to twelve months. Knowing the short term demand helps in managing the supply chain on an almost real-time basis. Also, the data here is adjusted according to the existing sales data. Short term demand estimation helps especially for those products whose line-up keeps changing. For most organisations, the short term demand does not suffice and long term demand forecasting is needed to be conducted.

Long term analysis

Long term analysis will help in estimating the demand for your product or service in the long run. Usually, the period here is anywhere between one to five years. The forecasting here helps in modelling the growth of your business. Sales data and market research being the parameters, long term forecasts may not always go exactly as predicted. This is because there may be several external factors that may impact one or both the variables. However, still, long term demand forecasting is needed as it acts as a roadmap of where your business wants to be in the long haul. The demand that is forecasted in the long haul impacts the sales, supply, funding and marketing decisions. For a growing business, it is important to plan for the future and be prepared accordingly.

‘‘

Long term demand forecasting is needed as it acts as a roadmap of where your business wants to be in the long haul.

The different methods of demand forecasting

There are several ways to derive the estimated demand for your product/service. The popular five are listed below –

Market research

The data that is collected via consumer surveys form the basis of market research demand forecasting. It is quite insightful but time-consuming well as surveys are needed to be created and distributed. However, the information you receive here is directly from your consumer or potential consumer and hence, it is of great importance. Some companies conduct market research on a continual basis while others prefer to do it only during research. It gives you a clear picture of your consumer and based on their demographics, marketing strategies can also be enhanced along with understanding their demand.

Delphi technique

The Delphi technique leverages the opinions of experts on your demand forecasting. In this method, you engage with experts outside of your organisation to understand your market forecast better and get their views on it. Usually, a questionnaire is sent to a group of demand forecasting experts. The responses of the experts are shared anonymously via a panel discussion. The process continues and answers are shared by experts in one round after the other. The answers shared in the previous panels impact the answers of the next round. This continues till the entire group of experts have come to a mutual conclusion.

The method though may sound quite extensive, it helps in understanding the views of experts on your business and its demand. Also, the reason behind the anonymity during the questionnaire helps in understanding the true views of the panels of experts. As the rounds proceed the group builds on each other’s expertise and opinions till they all arrive on the same page.

Trend projection

Trend projection is a simple and hassle-free way of demand forecasting. It basically used the trends of the past to understand and estimate the trends of the future. The data of the past sales of your product or service will be used to estimate the demand for your product/service in the future. However, it is necessary to take into account that if your sales were drastically down or up in a given period, that situation is unlikely to repat. For example, if you sell sanitizers and your sales were soaring high at the beginning of the pandemic, those high numbers are unlikely to stay the same forever. It is essential to observe and adjust any unusual factors that may have impacted your sales in the past.

Sales force composite

This is where the sales team takes the lead. In sales force composite demand forecasting, the data received from the sales team is used to understand and estimate consumer demand. This is because the sales team is usually closely connected to the consumers and may know how the consumers are feeling about your product/service. They take feedback and get requests every day from the customers and hence, they might know what is working and what is not. The sales division conducts meetings to collect the data from their team and develop a forecast accordingly.

Econometric

The econometric method as the word suggests is when you take economic factors into consideration while forecasting demand. Along with the external macro factors, even internal sales data is taken into account for predicting the demand. This method involves a lot of numbers as a mathematical formula is used for estimating the consumer demand in future. It reflects how the internal and external factors impact each other while estimating demand.

Demand forecasting is a great tool for your business as knowing the probable demand in future will help you in taking the right business decisions in the present. It is like a road map for your business. The mere demand for your product impacts its sales which impacts your profit which in turn impacts the growth and sustainability of your business.

The post Demand Forecasting 101: Meaning, Types and Methods appeared first on Dutch Uncles.

Innovation Leader, Salesforce Mastering Customer Service Management

Naina Sood — Fri, 26 Feb 2021 08:35:04 +0000

For years, organisations have been devising new methods and technologies to keep strengthening the customer relationship. The concept of SaaS-based Customer Service Management (CRM) solution has been championed by Salesforce, and the reason why there are many cloud-based solutions in the market today is because of them.

What Is Customer Service Management (CRM)?

In essence, CRM is any tool or technique used to gather customer data, and to provide a better user client experience. It refers to practices, strategies, and technologies that companies use to manage and analyse customer interactions and data throughout the customer lifecycle, with the goal of improving business relationships with them, assisting in customer retention, and driving sales growth.

What Salesforce Offer, How It Mastered The Craft?

Salesforce engages in the design and development of cloud-based enterprise software for CRM. Its solutions include sales force automation, customer service and support, marketing automation, digital commerce, community management, collaboration, industry-specific solutions, and salesforce platform.

Salesforce was the first company to sell a CRM in the cloud. It had set out to make a product that was simpler and easier to use than the bulky products that were available.

Instead of adopting a hostile attitude toward its competitors, Salesforce leaned in. They built a platform where developers could build custom applications on top of Salesforce, and created a central community where Salesforce users could build and sell their apps.

‘‘

Salesforce has focused on improving their CRM by quickly adopting and integrating the newest technology and making it available to customers of all sizes.

Integrating Solutions

Salesforce has focused on improving their CRM by quickly adopting and integrating the newest technology and making it available to customers of all sizes. At the same time, they keep adding new cloud services to serve a wide breadth of use cases and compete with other enterprise providers, like Microsoft and Oracle. For instance, the Salesforce CRM has an interesting marketplace – AppExchange which has many scalable pre-integrated apps. Based on the size of your company, you can select the application usage and payment.

Manifold Business Activities

Salesforce CRM services are not only meant for customer relations and management. They enable better improvement of sales, revenues, collaboration means, marketing deals, customer support services, and so on. They play a great role in marketing, HR, sales, customer support, management, application integration, and many other departments of a business. This innovation helps organisations in enhancing all the business segments.

Why is Salesforce in a Better Position Than Peers?

The company’s leadership in the CRM market is a product of its foresight and commitment to innovation. The company leads in exploring newly-opened frontiers like AI, cloud computing, and mobile technology which puts the company in an advanced position compared to its competitors.

As Salesforce faces competition from other CRMs and other business software, they keep creating more ‘clouds’, or products that serve specific functions, to get users into the Salesforce suite. Once they start using one product, it’s easier to cross-sell them on others. The product sprawl has helped the company compete with other large cloud CRMs.

What’s in it for me ?

For a developer/start-up, there are four key takeaways from Salesforce’s CRM story:

Develop something that is easy to navigate. People love using Salesforce because it is easy to customise.

Keep striving to make your product better. Even after 21 years, Salesforce has not stopped innovating, experimenting and focussing aggressively on new technologies to keep their customer happy.

Experiment with free tools. Free tools, or free tiers like Salesforce’s very first CRM, can help get your product in front of a wide audience and allow users to explore the value of your product for themselves. Keep pruning. It’s important to evaluate and remove any features that add more difficulty for your users—even if you are attached to them.

The post Innovation Leader, Salesforce Mastering Customer Service Management appeared first on Dutch Uncles.

Effective Ways to Use Technology in Your Small Business

Shalmoli Sarkar — Sun, 14 Feb 2021 02:35:04 +0000

A small business in India is shy in implementing technology as it believes that incorporating technology brings in complexities. But that is not true. Small businesses get entangled in the redundant processes of handling finances, scheduling meetings, handling customer queries, managing invoices, purchase orders, etc. All of these activities consume a considerable amount of time and human intervention can make errors, no matter how diligent your employees are. Implementing technology ensures greater efficiency and versatility, making it a natural progression for processes. Below are some pockets to explore where the inclusion of technology will prove to be cost-effective, increase productivity and reduce dependence on manpower.

Technology for better productivity

Businesses when they begin new, a single individual handles myriad responsibilities that demand enormous multitasking. Handling myriad functions by the same person can be a labourious task if he is a business developer who is into recruitment, and marketing as well. In such conditions, the use of project management tools or time tracking tools becomes beneficial to the businesses, since it can give a better picture of how much time we allocate for a task and find out the gaps that consume most.

Building better customer relations

For any venture to survive, it needs sales to happen. Addressing customer complaints and building a loyal customer base should be at the top of any business’s priority list. A business owner should begin nurturing customer relationships right from day one with the help of Customer Relationship Management (CRM) software. A CRM software gathers information at a central place that has the customer’s overall purchase history, customer info, and every customer interaction with your business, which can be shared with your employees as well. With CRM software in place, every question, every service request, and past detail of customers is at your fingertips, which benefits the business by understanding the customer better, identifying cross-selling and up-selling opportunities better, and acquire new customers. It is designed to help businesses to improve customer relationships and increase customer lifetime value.

Managing financials

Management of financials is the most vital part of any business where nobody can afford a single error. To streamline your accounting and bookkeeping process its accuracy and security should be paramount. Businesses should depend on the accounting software to automate the process of payrolls, receivables, and payables, efficient filing of taxes online, and other financially sensitive tasks. Further, businesses can implement cash flow management software to forecast cash flow based on past transactions and historical financial data within the software.

Learn, share and collaborate

The pandemic has pushed the workforce indoors which necessitates the use of cloud solutions to easily share, collaborate important documents with your remote workforce. Sharing documents through cloud solutions helps make changes and communicate them on the spot and share accordingly. This brings flexibility and seamless collaboration among employees. Implementing teleconferencing solutions and web conferences are an excellent medium to conduct meetings, inductions programmes as well as offer business training to your remote workforce.

The post Effective Ways to Use Technology in Your Small Business appeared first on Dutch Uncles.

Unravelling the Mystery of Public Relations

DU Desk — Sun, 27 Dec 2020 18:11:34 +0000

Public Relations (PR) often gets confused with the stereotypical image of a person standing behind a podium and giving a rigid press release to the public in times of crisis. Yes, damage control is one of the roles of PR but it is just one part of the process. PR has a far wider scope and plays a very important role in the day-to-day functions of a company.

Defining Public Relation

Public relations are the process of strategically communicating with or disseminating information to individuals, organisations or the general public to build and maintain a good relationship. In simpler language, it is the process of giving out select bits of organisation-related information or communicating in such a way that people see you and your business as a trustworthy source.

Companies usually hire a PR firm or team and outsource it. If it is a smaller company, they would most likely form an internal team to handle matters. The team or individual, depending on the scenario, would draft a specialised plan to communicate messages to the public or other parties through multiple channels. This could include social media, press releases, interviews, articles and so on.

‘‘

The relationship that a company maintains with its shareholders and customers ultimately determines its success.

The Goal And Functions Of Public Relations

The main objective of Public Relations is to maintain a good reputation on behalf of the company in the eyes of the public. People invest in brands that they trust and view as honest and transparent, or at the very least values them as a customer. PR helps communicate this to not only the public but also stakeholders, employees and investors.

Public relations are not, however, advertising for your organisation. The function of it is not to write stories for the papers or push for paid promotions to get in the public’s good graces. It rather uses free or earned media like social media, magazines, news channels and TV programs like those talk shows that you see celebrities promoting their new movies on.

The Founder of Value 360 Communications, Kunal Kishore, says that it is all about staying relevant and integrating all the various multimedia and digital platforms that we have at our disposal. “It becomes about how you stay relevant in a digital economy? The entire consumption of content is happening digitally with consumers relying more and more on the Internet world…so it is about how you devise a strategy for the next 5 to 10 years that takes into account the changing digital ecosystem.”

Taking this into account Public Relation agencies or specialists analyse the public’s perception of the brand and draft up strategies to improve that image using the free media platforms. These strategies could include:

- - Writing press releases.
  - Preparing speeches for company representatives.
  - Planning and executing public outreach events and media interactions.
  - Coming up with crisis-scenario strategies for extreme damage control situations.
  - Handling the social media presence for the organisation.
  - Coordinating PR strategies with the employees of the organisation and making sure everyone is on the same page.
  - Dealing with government agencies and policies issues that may arise.
  - Handling relationships with investors and stakeholders.

Identifying Which Types Of PR, You Need

Every organisation is unique and has a variety of needs when it comes to image building. The great thing about PR is that it has a large scope to identify which ones are a priority for your organisation.

Marketing

This type of PR generally supports the advertising team and the marketing efforts so that brand awareness and brand image can grow parallelly. This could include special outreach campaigns, public awareness of any guerrilla marketing and so on. Usually takes place when a new product or service is being launched.

Customer/community

When you think of the generic version of PR, this is usually the image that pops into the mind. Handling the social aspects of the brand through community-oriented outreach programs goes a long way in strengthening the trust that people have in the business.

Things like go-green initiatives, educational seminars and blood drives help build that positive image. To successfully execute this, however, there needs to be proper analysis on the needs of a particular community or customer base.

Employee/investors

Contrary to popular belief there is such a thing as PR within an organisation. This process includes caring for the employees and hearing them out in an attempt to create a healthy workflow. On the other end, it also means making the investors happy, producing financial reports, media issues and general complaints. Think of it as greasing the wheels of the organisational beast.

Government

This is not as prevalent as the other types of PR but still an essential part of keeping the company on its feet. It also boosts the brand image if it is endorsed or recognised by the government. On another note, to operate within a country, the business has to show the government that they are fulfilling the lawful policies in place such as:

- - Employee protection and fair compensation.
  - Fair market competition policies.
  - Consumer protection

Where Is It Needed Most?

There are generally three points in a business’s lifespan where PR is crucial. The launch phase, the growth phase and the point of sustainability.

Launch phase

When you are just starting as a business, it is unlikely that you will have the industry clout to go head-to-head with your biggest competitors or have access to the audience that you are aiming for. You will generally have access to a pretty wide and varied demographic and that is okay. Just use PR to reach your intended audience through channels you know they are active on, as well as your social media and website.

This will slowly but surely help bring traction with media outlets as well, thereby boosting your industry clout and getting the brand name out into the public sphere.

Growth phase

The first phase was all about the trial-and-error approach. It was also an opportunity to gather tons of data on the audience you eventually want to target. This stage focuses on using that information to refine the targeting process. Use the information, see which channels and which demographic gave the most positive response and pour your PR efforts into that to help grow it.

Sustainable phase

Once you have achieved the level of brand-recognition you wanted and the reputation you expected, the job now shifts from building to sustaining. Being well-known as a brand is walking a fine line. It can be great for attention but at the same time, you come under tremendous scrutiny. So, at this stage, it is best to use the data that was previously collected, to keep an eye on policy trends, socio-political movements, and the needs of the customers to ensure that your brand is walking the right side of that line.

‘‘

Maintaining healthy public relations is like having a net to catch you and your business if things ever go sour financially or politically. A good reputation will often help the company get out of even the toughest of situations.

Some Things To Be Wary Of

The great thing about PR is that it offers a vast number of options and benefits when used right. For one, it helps build the credibility and reach that an organisation needs to establish with the public. A good strategy has the potential to open a business up to a massive audience base and help it branch out on a large scale. It is also very cost-effective when considering the scope of reach that it provides as opposed to traditional paid media and advertisements.

There are, however, a few bumps to watch out for on this relationship-building journey. Unlike traditional media, it is very hard to measure the level of success a message has when put out. No guarantees exist as such that a given message or strategy will work even if it had worked earlier. Even with a press release, the media outlet will only publish if they feel it is a newsworthy story. It is a leap of faith combined with intensive audience analysis and research.

It is not an easy task by any means but it sure is worth it. PR done right has amazing potential to skyrocket your brand into the big leagues. Check out our article on ‘branding’ to learn more on how to make the best of both worlds!

The post Unravelling the Mystery of Public Relations appeared first on Dutch Uncles.

AIDA: A Tried-and-True Marketing Strategy

DU Desk — Sun, 27 Dec 2020 17:53:04 +0000

You cannot build a house unless the cornerstones have been laid and the foundation happens to be solid. The same applies to building your business on half-baked marketing theories. To truly understand how to successfully orient your business in today’s economy, you need to go back to basics and establish that strong foundation in said strategy.

There are so many models and theories when it comes to marketing and advertising nowadays. The AIDA model is different, think of it as the ancestor to most of today’s modern advertising concepts. The chances are you heard about this in school, the fact is, the model is still relevant and in use to this day!

What Is The AIDA Model?

It is an advertising model, that is to say, it helps marketing agencies and businesses identify the level of engagement that customers have with their products. The model in itself lays out the different stages that an individual most likely goes through during the process of purchasing a particular product or engaging in a service. Here is the breakdown of the acronym:

A – Attention

This is the first step in the model, which states that attracting the customers’ attention is the key to begin the engagement and purchasing process. This is usually done through some sort of advertisement.

I – Interest

Piquing a customer’s interest is the intermediary stage. Where the first stage grabs their attention, this one gives them a reason to stay interested.

D – Desire

Now that you have their interest in the product or service, it is time to make them want it. Nudge them into a mindset that urges them to buy it.

A – Action

The final stage of the process is getting them to go to the store and execute the action of buying the product or service, as is the goal of every marketing campaign.

‘‘

AIDA is a tried and true model that maintains relevance even in today's market situation.

The History And Relevance Of The Model

The AIDA model was first brought into this world by the American businessman, E. St. Elmo Lewis, in 1898. His aim was to create a simplified model that could determine the ideal level of engagement by the customer. He used the scientific method to create this model which illustrates the most effective way to conduct sales and advertising.

The main purpose of the AIDA model was to optimise the sales calls and maximise the interactions between the seller and buyer when it concerned a product or service.

How To Apply It In Your Marketing

In theory which has been proven in practice over the years – if you structure your marketing campaign with the AIDA model in mind, it provides more control over the path the customer takes when purchasing. As they progress through each stage of the model it subtly pushes them more and more towards purchase. It is so subtle in fact that most of the time customers will feel like it was completely their choice to have purchased it. If you think about it, the model really is a very effective psychological tool.

Here Is How You Can Implement AIDA In Your Business Model:

Attracting attention

The attention-grabbing aspect is taken for granted by many in the marketing industry. Do not just assume that everyone is aware of the existence of your product. To grab the customers’ attention is to deeply engage with them and this creates curiosity. The most effective way to do this is to be loud, colourful, unique and actively break existing visual patterns (especially in print advertisements).

For example, place your ads in unusual but active locations like a subway station or bus stand. Make it stand out with some thought-provoking images that may shock the audience. You can even place a highly targeted message at a specific demographic based on the nature of your product or service.

Creating interest

This is usually the hardest part of the process where you have to push the audience from “I see it,” To “I like what I see.” Once they see it, they should want to learn more about the brand and the product. This type of interest can be hard to cultivate if the product or service is not particularly interesting. To achieve this interest try sticking to the meat of the message, that is to say, have a clear-cut message that compliments the best aspects of the product and tells them why it is useful.

A good example of this is a McDonald’s advertisement which had nothing but a billboard with two lights shining down and creating a shadow outline of the signature ‘M’ with the words “OPEN AT NIGHT” on the board. This combination of creative visuals and simple message focuses on the 24/7 availability of the fast-food brand.

Building desire

The interest and desire aspect go hand-in-hand if you think about it. This is more of the tail end of that process. You push them from “I like it,” to “I NEED it.” A good rule of thumb to maintain is that people only buy products that they trust. So, establish trust with consistent content.

For example, if you look at infomercials, they consistently put the product in various creative situations that test the limits and uses of the products, showing the audience how versatile and useful it is. This shows the trust aspect of it. Then the message of how it makes their lives easier fulfils the needed aspect of the message.

Taking action

The last step is to get the customer to go out and make the purchase. If you did all your other steps right, this should be the easiest part. A good way to do this is to have a subtle call to action on your advertisements.

Streaming services for example, like Netflix and Amazon Prime, call their audience to action by giving them free trial periods to see if they like the services being provided. It literally would cost nothing to try it, and given the benefit of having access to the latest shows without that cost is all the reason the audience needs.

Other Uses For AIDA

The simplicity of the model allows for flexible use in various other areas of a business apart from just marketing and sales. For one, it can be and is actively used in public relations planning and campaigns. It can also be used in e-commerce platforms to map and measure the effectiveness of products according to the four steps.

Some Shortcomings And Criticisms Of The Model

Nothing is perfect. For the majority of its lifespan, the AIDA model has been viewed as a golden rule of marketing but in recent years the general consensus seems to be that it is too rigid. Yes, it is actively used in many areas of business even today and will likely continue to be used. However, many economists feel it is outdated when put into the context of today’s economic environment.

For one, it fails to address the emotions of the audience. It also does not consider other important factors such as socio-economic backgrounds or other demographic data. At the other end of the line of criticism, the step-by-step sequence of the model is seen as too linear for today. It assumes that the four-step AIDA model is exactly what a potential customer might follow, but in reality, the sales process does not always follow this format.

It is for this very reason that we nowadays see variations and branch-offs of the classic AIDA model. Some examples include:

- - AIDCAS (Action, Interest, Desire, Confidence, Action and Satisfaction)
  - REAN (Reach, Engagement, Activate and Nurture)
  - NAITDASE (Need, Attention and Interest; Trust, Design and Action; Satisfaction and Evaluation)

‘‘

Though there are certain limitations to the AIDA model, the modern versions of can help converge on those gaps and give you a good foothold in the marketing game.

These branch-offs come as a result of the AIDA model being viewed as too simplistic and the failure to consider the above-mentioned nuances when considering the sales process. In today’s circumstances – given the various forms in which sales and marketing can take place – every customer experience can and will vary, be it online or in person or through social media platforms.

Having said that, it is still a very relevant model, despite what economists might say as it is one of the cornerstones upon which modern advertising principles are built and can still be practically used in the modern context. Although it does not represent the entire purchase and sales process it does serve as a good tool for ‘customer journey mapping’ and setting the stage of how the customer might go about engaging with a brand.

The post AIDA: A Tried-and-True Marketing Strategy appeared first on Dutch Uncles.

How Inbound Marketing Attracts Customers?

Shalmoli Sarkar — Wed, 23 Dec 2020 06:24:20 +0000

Importance of Inbound Marketing for Precise Targeting.

In the middle of a workaholic’s business hours, a phone rings suddenly that says, ” Hello Sir, I am Ashwin from Killcare pesticide services, would you like to have a pest control.” And the phone is cut without even hearing what Ashwin had to offer.

A youngster of ’20s who was visiting a musical instrument site to know more about acoustic guitars, became irritated when he saw Killcare’s display ads covering most of the screen space. He was annoyed to the extent that he marked the ad to be ‘irrelevant’ when Google displayed the reasons for closing the ad.

The above experience that Ashwin and the display ad of Killcare pesticide services received is a hindrance faced by almost all small business owners and start-ups while marketing.

The problem in both the cold calling and display ad situations was that they were outwardly trying to push the brand, product, or service to the people in the hope of generating leads or customers to a broader section of the audience. Marketing messages delivered in this manner are rarely remembered or precisely are ignored and have lower chances of generating leads. Generation of leads and expanding the customer base is the ultimate motto of any business. For this, the marketing messages should be designed to draw visitors and potential customers, than random cold calling and putting display ads on irrelevant websites to the uninterested audience.

Designing marketing and communication strategies to attract customers who are actively looking for your solutions online by the creation of valuable content experiences that are tailored to the relevant audience is inbound marketing. Inbound marketing establishes connections with the audience who are looking for your services and solves problems that they already have. Inbound marketing happens in three stages:

Attract

With relevant information and conversation drawing the right set of audience and position your company to be a trustworthy one by using tools like SEO, content marketing, and videos, etc.

Convert

More than selling the product, we should sell solutions through inbound marketing that aligns with customer pain points. In the second stage, we try to convert the visitors into leads by using well-placed call to action, landing pages, and forms. Also, provide valuable content like e-books, whitepapers, infographics, and webinars, etc.

Delight

providing help and support to empower your customers to find success with their purchase.

Why should one use inbound marketing?

Inbound marketing works well with businesses, particularly those that have a long sales cycle, whose target audience takes time to research different offerings and weigh the pros and cons of each. Hence, here inbound marketing plays a pivotal role as it builds to help brand awareness and trust. For instance, let us say you run a new B2B company where you offer cybersecurity solutions. Through your product, the customers can detect any anomalies or deviations in network behaviour to identify any future attacks. Investing in cybersecurity solutions cannot be an impulse buy. Potential buyers will ensure to check the competitors and pricing, educate themselves as much as possible before making a purchase. Inbound marketing here will help to cultivate a brand that would want the prospects to know they can seek help to clear doubts and solutions when they want to. We need to demonstrate value.

Benefits of inbound marketing

Reach new markets and audience

Because inbound marketing is done purely online, it allows us to reach new audiences and markets by diversifying the reach by running different types of campaigns. Say for example Killcare pesticide services wants to market itself as a provider of pest care services that uses less harmful chemicals. With inbound marketing and running native ads, in particular, you can target people by including keywords like’ less chemicals pest care’ or ‘no smell pest care’ in your content. People who type such keywords will be able to see your ads. Thus, it is more targeted and relevant marketing, unlike traditional marketing where the sample size is large and not sure if they are interested in buying your products and services.

Cost-effective

Unlike traditional marketing that involves short-term marketing or campaign, inbound marketing is a continuous process that requires building a brand online, creating content, and conducting successful campaigns.According to a survey conducted by HubSpot, businesses consistently reported that the cost per lead for inbound marketing is 60 percent lower than the cost per lead for traditional marketing. It gives better ROI than traditional ways.

Build brand awareness and visibility

The blog posts, videos, website, presence in social media, whitepapers that we create helps in spreading the word and make your brand known. For example – If Killcare pesticide services come up with a blog post or video on its website or social media about controlling cockroaches in moist and damp rooms. It is then imparting knowledge to the visitors as well as establishing itself as not a usual pest care brand. In this way, we can bring the brand in front of thousands of prospects and educate them about the company, and subtly try to shape their opinion about the business. If someone is looking to buy a product online, they find your website searching Google for that product, where they read your content that has everything they need to know about that product. Based on the reading, the prospects begin to trust your store as being reliable and safe and purchase the product from you.

The problem with ad blockers

It often happens that when we are visiting a site, big banner ads suddenly pop up that occupy the maximum of the screen space. The banner ads are generally cost-per-click ads and are particularly suitable for targeting potential customers in the awareness stage of the marketing funnel. But for many users, display ads are a big source of distraction while viewing, and to dodge display ads from popping up they install ad blockers. Ad blockers are simple software programs that prevent ads from being shown on websites. According to Marketing Sherpa, the reason people install ad blockers is that display ads cause the webpages to load slow. Also, a study from Page fair says that they found the display ads to be an intrusive and hidden threat of virus/malware. Ad blockers are a challenge since display ads form a major chunk of inbound marketing, and we need to think of alternate ways to reach our target audience.

‘‘

The aim of marketing is to know and understand the customer so well the product or service fits him and sells itself.

-Peter Drucker, founder of Drucker Institute

Do’s to make customer click you

Here are the do’s small business owners should keep in mind while designing inbound marketing:

Content that stands out

Human’s attention span is only eight seconds. We have numerous small businesses on the internet who are competing for that eight-second slot for audience attention. How many of them get noticed? Place yourself in the customer’s shoes. It is not just enough to produce content. The content created must educate, inspire, or entertain the audience. Instead of speaking about the brand or product often, include interesting dialogue and discussions with your content.

Include a call to action

It is indeed a herculean task to get traffic to your site. Imagine a visitor who has come to your website after reading the blog, after which he is unable to find or doesn’t know where to go next or what to do next once they visit. The call to action is a sign that directs the visitors where they should go next. If visitors have come to your company’s DIY videos or blogs, we should direct them to subscribe for more such similar content by providing a suitable call to action.

‘‘

If great content is the hero, then banners are the villain.

-Michael Brenner, CEO of Marketing Insider Group

Strategies for inbound marketing

Inbound marketing houses numerous tactics, below are some of them:

Webinar

There are certain things that the audience might not understand just by reading content. A webinar is a highly engaging internet discussion, that has lecture-style content from the experts of your company to reach an exclusive web audience. The expert will guide, provide valuable information, discuss the pros and cons, clear misconceptions, etc. Through webinars, we target those leads who have passed the awareness stage and are in the process of solving a problem. Webinar induces conversational engagement among the audience as they can voice questions, present opinions, and chat. Businesses can also generate leads while registering for the webinar as people will use their email id and phone number to receive the link. Thus, with this, they have highlighted themselves as lead and will be curious to know the future topics to be discussed in webinars. Webinars are particularly suitable for B2B companies where the buyers would like to understand more about the company, its people, and offerings. For instance: Net monastery, a cybersecurity solutions provider, organizes regular webinars for the corporates to let them know more about advanced cyberattacks and how cloud security management can safeguard your corporate data.

Podcasts

Remember how our grandma used to tell us stories with the line ‘Once upon a time’, which used to raise our attention and also submitted ourselves. Through podcasting, we can attach a personality to our content. Storytelling through audio is the oldest medium of communication that has no boundaries. The human brain processes information faster through audio than video. Podcasting triggers emotions, stirs memories, paints pictures, and motivates people into action. Podcasting might appear to be expensive and labour intensive, whereas one can create digital audio files with a couple of good mics, a laptop, and a good voice. Sharing of digital audio files can be on various social media platforms and its website. More and more people are turning to podcasts for reflection, knowledge, and entertainment. Podcast is suitable for businesses who are in sectors like -education, health, finance, fintech, mental wellness, and banking etc.

Video series

Not everybody has the patience to read long-form content. Generation Z prefers more video content than millennials. In such cases, divide your most long-form content into short video series to be published on the internet. For example- a company like Killcare pesticides has a product range of pesticides in the form of tubes and sprays for domestic pest care. Now imagine, a long-written content will be mundane for the audience. If Killcare comes up with a 5-min DIY video series on ‘how to control pests using Killcare product’ that will be more useful for the audience.

Native advertising

Display ads make the audience reach ad fatigue, a stage when they stop paying attention to ads. Native advertising here comes as a boon. Native advertising is a paid ad with the difference being its appearance. It seamlessly aligns with the publication or a site’s editorial design and style in terms of colour and font and seems like regular content. Native ads are difficult to identify as it blends in with organic content making it unobtrusive to viewers. The content can be topped with a catchy title that entices the viewers to click on it. Native ads appear as infeed ads on social media (Facebook or Twitter), as search and promoted listings on google search results, and also appear as content recommendations just below the article read.

In-app advertising

In-app advertising is presenting the users with ads in the middle of using the apps. Gaming apps like Candy Crush allow ads to appear in return to get bonus rewards or life to advance in levels. Advertising on various music streaming apps like Spotify and Gaana prove to be an effective monetization strategy. Research from Spotify shows that 81 per cent of listeners have taken action after hearing audio ads during a podcast. After hearing the ad, they have researched a product online, connected with the brand on social media, or talked about the brand with others. Thus, in-app advertising is a vital marketing channel for brands. With sophisticated data tracking of GPS location, device type, operating system, gender, and age, the in-app environment allows us to reach the right set of consumers precisely. Also, ad blocking technology cannot block the in-app mobile ads.

Content marketing

To the recipe of inbound marketing, content is the main ingredient. Without fresh and useful content converting leads will be difficult to convert leads. The content should come in multiple forms to help your audience answer a question or solve a problem and break through the content clutter. Below are some ways to ace content marketing:

Blogging and newsletters

A quality blog is an effective way to answer the pain points of the prospects. A blog is a hub to keep your audience informed and prove that you are a thought-leader in your industry. For example, Swiggy has come with Swiggy diaries that is their official blog that publishes informative content that ranges topics from the technology used at Swiggy to various food blogs. Similarly, newsletters help to educate prospects about the happenings of the industry.

Create eBooks and whitepapers

Whitepaper and short e-books are an in-depth, well-researched piece of educational content that sets a formal tone than the blogs. It will develop your brand as an authoritative resource of actionable and insightful information. If one is interested to download you may collect the lead’s contact details like email id in exchange for downloading the free whitepaper or e-book.

Case studies and customer testimonials

Case studies empower prospects with confidence that someone similar to them was facing the same problem and availing the product or service has solved it all. It demonstrates to the people on the fence that your product or service has done wonders for people just like them.

The post How Inbound Marketing Attracts Customers? appeared first on Dutch Uncles.

Smart Marketing in Pandemic Times

Shalmoli Sarkar — Sat, 19 Dec 2020 07:48:40 +0000

The need of a smart marketing plan

A marketing plan is all about a company’s strategy for how you will communicate with your target audience and influence them to buy your products or services. The deadly contagion of Coronavirus has brought the economy and businesses to their knees. It has altered the rules of marketing. Now, startups need to opt for a smart marketing approach, as for a start-up, the herculean task is to maximize reach and bring in more customers.

To maximize reach and awareness, the newly begun start-ups should think upon creating marketing plans that should be in tandem with the current consumer behaviour in the ongoing pandemic. After a start-up has received immense reach and awareness amongst its target consumers, its work does not get over. For a venture to survive, the young business needs to retain loyal and satisfied customers where the next step will be to create a brand recall.

New trends of consumer behaviour in the pandemic

The outbreak of the coronavirus pandemic has brought a drastic change in consumer behaviour. It has inflicted emotions of fear, anxiety, and restlessness further worsened by pay cuts in salary, job insecurity, facing operational challenges of working from home thus leaving the consumers with a negative and cautious mindset. It is anticipated that this behaviour will persist until the vaccine is ready.

‘‘

The Covid-19 pandemic has established a 'digital first' lifestyle for the majority of the global population.

New consumer trends to design smart marketing plans

Slow Out-of-Home consumption

Though lockdown restrictions have been easing gradually, the footfall in restaurants, malls, showrooms, cinema theatres, café shops will experience a decline in footfall as compared to the pre-Covid-19 times. People want to minimize store visits as much as possible that will eventually create a spike in online purchases for buying essentials and food products with take-away and home delivery options becoming an essential part of the business.

Buying behaviour

It has fuelled the urban consumers to buy larger pack sizes to minimise visits to shops or stores wherein rural the proclivity of buying will be for smaller sizes and sachets to conserve money.

Becoming self-dependent

Heightened concerns of hygiene has made people do their laundry, haircut and spa, housecleaning, and car wash that once required others. There will be an uptick in demand for brands that will provide products or services with DIY or tutorial videos.

Sustainable buying

The current survivalist mentality will make consumers more mindful of what they are buying. There will be a tendency to limit food waste, spend less on luxury products, and choose more sustainable options. A recent report from Accenture says that in the coming decades, 82% of the consumers will be making more sustainable choices for buying. While Gen-Z enters the workforce, they will favour buying from companies that are more ethical and conscious. That will also open new avenues for start-ups to explore new business models in sustainable products.

Focus on health and hygiene

With normalcy restoring in people’s lives, there will be heightened concerns on hygiene and a leading a healthy lifestyle. Highlighting the hygiene measures taken by some of their delivery persons or enabling contactless deliveries and payments will ensure trust again. Customers also perceive value in such brands where initiatives like promoting wellness and building resilience through online fitness classes, mediation, yoga, art therapy, and other wellness solutions.

Digital lifestyle

Post Covid-19, consumers will look forward to availing services that provide digital solutions that limit people movement, reduces cost, and yet increases productivity, for example- video conferencing, telemedicine and EdTech, etc.

Smart marketing plan for a better reach

Crisis is the real litmus test for start-ups here. It is a test to see how humane the start-ups are to their customers in unprecedented times. To maximize reach, start-ups must first create value for its consumer. A smart marketing plan in a crisis is the one that encompasses relevant content, excellent customer problem solving, competitor analysis, and offers comfort that is modified to fit best with the current needs of the consumer.

Offer convenience

One of the ways to begin with smart marketing is offer convenience.Individuals are juggling to maintain work-life balance, pursuing higher studies hence leaving them lacking for time. For start-ups to get the attention of the time-deprived target audience, start-ups need to deliver convenience. For this, we need to create an information portal that acts as a one-stop destination to answer all the queries of the consumer. The experience of shopping for products or availing services or booking appointments should be hassle-free where they should offer multiple payment options, a smooth-running user interface, and excellent customer- care support by leveraging technology like AI, Chatbots and Bigdata.

Bring out the relevance

The young entrepreneurs should highlight the relevance of the product or service and how it can be beneficial to the customer. In today’s digital milieu, entrepreneurs should reach out to their target audience through multiple online channels showcasing tutorials or DIY videos of their product hence emphasizing unique ways that your current offering can fulfill the target audience’s needs.

‘‘

During the pandemic, usage of social media has increased upto 87 %.

-Hammerkopf Consumer Survey

Focus on social media marketing

The rise in usage of social media by 87% in the pandemic is speaking volumes about the audience’s presence in social media. The creation of content that is in line with current customer sentiment and feedback that adds value by educating and entertaining is certainly going to drive customer engagement.

Building goodwill

Reach out to the needy communities by donating, volunteering, or collaborating with other businesses with a motive to better serve the community. Philanthropic activities will help increase community support, goodwill, and brand awareness. Encouraging employees to take part in corporate social responsibility will infuse a positive work culture. Also, using influencer marketing and vernacular content will be effective in reaching your audience and building credibility as they can spread social awareness messages in regional languages where the audience will be most comfortable within.

Auditing sales funnel

It is necessary to do a competitive analysis. In a dynamic business environment, it is essential to thoroughly audit your sales funnel and analyse the data to bring changes in marketing plans.

Proactive communication to reduce anxiety

It is majorly applicable to the service industries. Being proactive and maintaining transparency in communications help in reducing anxiety and gives a level of customer satisfaction. Proactively informing customers about refunds, delays, cancellation policies, availability of stocks, regular temperature checks of employees, or delivery men and hygiene measures at the stores keeps customer worries at bay. Companies can ensure that their communication with customers is simple, clear, and reduces effort to comprehend.

What Not to Do

We must acknowledge the current state of affairs in the messaging of our marketing plan, but care is to be taken that we do not flood our target audience with generic information but educational or entertaining marketing messages that add value and enhance the customer experience.

Avoid being desperate for sales or over-promotion of your products or services. With a slowdown in the economy and pay cuts, there will be a tendency for judicious spending. People might perceive the company or brand to be insensitive or greedy for over promotion for sales. Ensure that every communication you have with your customers has a purpose and value, whether it be on your website, through email, or on social media. As the social and economic situation changes, adjust your marketing strategy accordingly.

For newly begun ventures, the pandemic induced lifestyle will be the new normal, where the marketing plans should be tailor-made to suit the customer interests for maximizing reach.

To learn more about the essentials of marketing, read ‘7Ps of Marketing‘.

The post Smart Marketing in Pandemic Times appeared first on Dutch Uncles.

Customer Loyalty Strategies for Small Businesses

Shalmoli Sarkar — Sat, 19 Dec 2020 07:30:57 +0000

Customer Loyalty Strategies for Small Businesses and Startups

Quite famous by the name ‘The Coffee Theory’, Rohit’s café quickly rose to become people’s favourite. Usually, the cafés are known to be a hangout point for youngsters, but this café has branded itself to attract individuals who are young not by just age but the heart. The elderly people who are planning to meet someone in the second innings of their life chose to meet always at ‘The Coffee Theory’. For acquiring more customers, Rohit’s marketing spends increased with every passing month. Generally, expensive dishes like Lasagne, three-cheese pizza, and baked macaroni pasta were available at slashed prices in his café to defend the competitors. He also gave a waiver in food bills to those couples who proposed to each other in his café. One day, a look at the accounts book raised his eyebrows, when the budget to buy raw materials to introduce a new range of Blueberry and fruit muffins fell short. He realized that he needs to lower his marketing spends and focus more on customer loyalty, and bolster the revenue pipeline.

Like Rohit, many small businesses in a feat to achieve maximum reach and customer acquisition forget to create a programme on customer loyalty.

Small ventures to stay in this competitive environment indeed need new customers to acquire but business owners are so obsessed with the acquisition that they forget to make efforts to retain the old customers. As per the Harvard Business Review, acquiring a new customer is five to twenty-five times more expensive, since first time customers are not easy to convince. Successful businesses are built around a robust customer strategy. In a dynamic business environment, the barrier for new entrants to do business has reduced, adding to more competition. Loyalty programmes help to strengthen customer relationships for a lifetime and give repeat business.

What customer loyalty brings to the table?

Once businesses have reached a stable number of customers, it is time to shift the focus from marketing to build profits and provide better products and services. Customer loyalty brings certain benefits to the business like:

More repeat business

Rohit would have had enough budget to introduce the new muffin range had he lowered his marketing budget. As per Gartner Group, 20 percent of the loyal customers generate 80 per cent profit. Nowadays, customers buying decisions are not dependent on the best price but the emotional connection they share with a company product/service. Loyalty programmes should go beyond the point of purchase to build deeper connections and provide more value to customers keeping them satisfied in the hope of more purchases and store visits.

Less pressure from competitors

When we try to lure customers from competitors, we tend to lower the prices or give frequent discounts on the products or services, since customers are usually price-conscious. But this strategy is not sustainable in the long run for running operations. As we lower the prices, we decrease the profits affecting the revenue. But with a loyal customer base, there is no need for the businesses to keep the price low to attract customers. Despite the competition around, owners will still have the confidence that sales will be recurring. If customers are satisfied and trust your business offerings they will not be easily lured by the competitors even if they offer low prices.

Word of mouth marketing and recommendation

Loyal customers are your biggest brand advocates. Human beings tend to listen and believe what their elders or friends say. When your loyal customer base communicates about your business and offering with their social groups and acquaintances, it influences the listeners to try out the products or services from what they have heard rather than listening to advertising or sponsored messages.

Customer loyalty has evolved over the years

Online businesses have long held on to the characteristics of Indian consumers being ‘Price Conscious’, and have exploited this trait by designing customer loyalty programmes around predatory pricing and massive discounts. With increasing incomes and aspiring to live better there has been a shift among Indian customers from being price conscious to feel more valued, more recognition, more convenience, and more privileges and perks, etc.

While designing a customer loyalty programme, apart from giving plain vanilla discounts, there should be a balance of emotional loyalty as well. The customer should be able to experience the benefits in exchange for loyalty served to your business. For instance, flooding your customer’s email inbox with daily promotions with offers like – ‘BUY 2, WE WILL PAY FOR THE 3RD ONE ‘or an end-of-season sale is not fostering an emotional connection between the customer and the business. Mouth-watering deals or discount coupons are time-bound, and may not suffice for a business to retain loyalty for a long time. Customers will get swayed as soon as some other company provides better discount options and gift options. Small businesses should not keep their rewards program for a few months or weeks. It is because the customer at any point might exceed the date to redeem the points or discount coupons resulting in dissatisfaction despite being loyal to the business. Instead, design the program in a way that the customer eligible for rewards will be able to enjoy its benefits on any day of the year.

‘‘

As per Gartner Group, 20 percent of the loyal customers generate 80 per cent profit.

Strategies for customer loyalty programmes

Live chats

Efficiently solving customer grievances is the prime driver of customer loyalty. As said buyers nowadays seek convenience, an efficient customer service system in place will make your company appear friendly, helpful, and trustworthy to the customers. Good customer service ensures repeat business as the customers know that if faced with any problem, their dedicated team will solve our problems. Live chat features are an excellent way to be interactive with their customers.

Customer analytics

The customers of the digital era are well-informed with the abundance of information available hence are engaged and have an active interaction with the business.Customer analytics-driven with artificial intelligence can provide a 360-degree view about customers buying behaviour for example- when and how they make a purchase, what are the frequently bought items or services, the average ticket size of buying, whether they have closed a purchase or not, etc. It is linked with the core functions of the business towards customers – acquisition, engagement, retention, and revenue generation. The data received from analytics is structured and relevant to giving insights and help in crafting more personalized rewards giving customers a better experience of associating with your brand. Customer analytics helps increase response rates and decrease customer attrition by predicting customers who are mostly to leave and recommend the right proactive methods for retention and deliver the right message to each of the target segments. Since we are focusing on a specific segment of customers by a targeted messaging and strategy, the cost per conversion and overall marketing costs will come down.

Swiggy uses data analytics to display the list of restaurants based on customer’s taste preferences, past food order data, and real-time feet data to reduce delivery time and retain customers. Swiggy has built a concept called ‘Food graph’ where they break a food dish by recipe, cooking style, calorie value, ingredients used, and variations of the food. By combining the food graph with a customer’s past food preferences, Swiggy can offer a personalized restaurant feed at the app homepage itself.

Gamification

Who doesn’t like to play games? Playing games to earn loyalty is an excellent way to engage customers. When we gamify interactions with customers, businesses appeal to satisfy human desires and instincts such as competition, exploration, curiosity, and the happiness of achieving the win. Gamification can be used by companies who want to turn this mundane system of loyalty programmes into a fun activity.

For example: Goibibo, an Indian traveling, and hotel aggregator app has introduced the game ‘goCashFest ‘during the Indian Premier League 2020. Users playing the ‘goCashFest’ game will collect GoCash (points) whenever Mumbai Indians play. The users will earn GoCash during the match by keeping their Goibibo app open during every Mumbai Indian match. Users will start collecting GoCash as the players hit boundaries, sixer, score 50s, 100s, or take a wicket.

Create a customized mobile app

Developing an app for business is filled with prejudices such as expensive, the hassle of developing the app, and knowledge of coding is required etc. Many programmes can build a custom-made app for your business. App makers use a template format that enables you to put in your branding, artwork, and business-specific information. With an app, you can put in a loyalty program that can track the customer’s purchases for future rewards. The example of The Bar Stock Exchange is apt for this. The Bar Stock Exchange is a fun, unique, and India’s first stock market based pub chain that has its customized app where it displays the drink prices that change based on real-time demand and give an experience similar to trading the stock market. As soon as the customers walk in the bar they are asked to download the app for ordering the drinks.

‘‘

Social media is a contact sport.

-Margaret Molloy, CMO of SeigelGale

Social media customer service

There is rarely any such business without their presence in social media. For the past decade, social media has been the new platform where audiences vent out their anger and shower appreciation. Hence, it is imperative to social media platforms as a means of customer service to retain customers. Businesses can use social media customer service to address customer concerns to build trust and loyalty. Examples of social media customer service include businesses replying to tweets and mentions with offers of assistance.

Customer loyalty programmes without tech intervention

Use of punch card

Punch cards are one of the most used reward programs for business to customer companies. In this system, the customer receives a card that gets a hole punched with every store visit or a purchase they make. Once a customer reaches a certain number of punches, he/she becomes eligible for a reward. This reward system will guarantee that the customer comes to the store or makes a purchase the required number of times to issue the reward.

The ‘member’ only rewards

Human beings want to feel special. This particular loyalty programme is to create a membership club. Customers like to become a part of exclusiveness. It makes them feel like they have an ‘in’ with the business and get an advantage over others. In this, we can choose to keep the membership plan either paid or unpaid or membership in tier plans.

Paid membership: The fashion and lifestyle brand Bewakoof brands has launched a paid membership club by the name Bewakoof Tribe where the interested customers can pay Rs 99 for a three-month membership and Rs 399 for one- year membership. The benefits of joining Bewakoof Tribe are to get priority customer support, access to exclusive collections, and discounts on merchandise.

Membership in tier format: There will be a particular set of customers whose purchasing frequency will be weekly, monthly, or fortnightly. We can also take them under the umbrella of loyalty programmes by introducing paid membership plans in a tier format. Every tier has some rewards to offer to the customers. For instance: OYO has introduced the OYO Wizard programme that has three tiers of membership- Blue, Silver, and Gold that are six, twelve, and twenty-four-month plans respectively. This plan offers unlimited hotel bookings during the period, cashbacks on every stay, discount coupons on hotel bookings etc.

Free trials/new product

If the company is introducing a new product or service, it can begin by offering a free product/service trial session to its loyal customers. It acts as a reward for customer loyalty as well as a marketing tactic through word of mouth that will induce a future sales call. For instance- A bar owner can invite its loyal customers for a fun wine crushing and wine tasting event that will be their upcoming wine product to be served in the bar.

Building loyalty among customers does not happen instantly. It takes months and years to infuse loyalty. Playing the right cards will help to create strong brand loyalty that does not fade with time.

The post Customer Loyalty Strategies for Small Businesses appeared first on Dutch Uncles.