Dr. Wael Badawy, IntelliView Technologies Inc., Calgary, AB, email@example.com, CYBF Mentor
Attracting new customers is the number one priority for companies and businesses in the commercialization or the selling phases. No matter what the industry, firms need to continue attracting new customers and consider the cost of doing so. Every customer has a cost associated with it. An experienced sales manager will look at these costs and target the customers that will provide the most revenue for the lowest cost (and that present the lowest barriers to buy).
Whether your business is online or bricks and mortar, having a lot of traffic near the place of business can help, but people passing by need to be interested in what you are selling in order for them to become qualified customers.
It has never been proven that having a storefront on a busy street will guarantee enough revenue to sustain a business. To give an example, imagine you open a barber shop in downtown Manhattan on one of the busiest streets in the world. Will you make money? Not necessarily. During business hours everyone is busy at work and only visitors and tourist are around. At noon, employees from nearby offices are having lunch and then heading back to work. After hours and over the weekend, only visitors and tourists are walking by. The only potential customers for you will be the people who are specifically out looking a haircut and who happen to be in your area. It is not always a good idea to be located in the highest traffic areas unless you are confident you can turn some of the traffic into qualified customers. As a barber you are better off in the suburbs where you will have less traffic, but more qualified customers.
The type of traffic you should be looking for is the traffic that can be converted into a paying customers (‘paying’ is the key word!). It is clear that if you can enhance the quality of the traffic around your business, you will be better positioned to convert a higher number of people into customers.
In many businesses, you may find you get four paying customers out of every 100 potential customers. Online businesses may find that ratio to be more like one paying customer out of every 100,000 hits. The Internet has close to 1.2 billion users which presents a lot of potential for you and your business.
Referrals and Loyalty
Attracting new customers is challenging and can get expensive. Referrals are the best and usually the cheapest way to grow your customer base. My insurance company encourages referrals by sending a gift card for $5 for every new customer that we refer. Fitness clubs may provide an extra personal training session for every referral. Restaurants could give a 10% discount or a free drink for a referral or a second visit.
Another approach is to provide a loyalty program. An ice cream shop could give a free cone to customers after they buy five cones. Airlines provide points to keep you flying with them instead of the competitors. “Buy 1 get 1 free” coupons or discounted items are also very common and effective in attracting customers as long as the cost is controlled and accounted for in the profit.
In my company, once we identify our target audience, age, type, financial strength and more, we approach other businesses such as downtown restaurants that reach out to the same target audience and offer to exchange advertising space, referrals or products/services with them.
Joining industrial, technical or communities volunteering groups is another way to try to access customers. I was able to close my first half-million dollar deal for my employer with a Fortune 100 company through a volunteer placement I undertook.
In summary, there are several ways to grow a customer base. Be creative! Please email me at firstname.lastname@example.org if you’d like to discuss a new idea.
(Wael Badawy is a Canadian delegate for the G20 Young Entrepreneur Summit happening in Nice, France from October 31-November 3, 2011. Click here to read more about him and the rest of the Canadian delegation.)