There is a common mistake that 90% of all small retail business owners are making, that can either double the growth of your business, or save it from spiralling losses month after month.
This is a simple retail marketing technique not done.
This mistake is so obvious and the hugely successful firms are exploiting it day after day, yet many entrepreneurs have overlooked it for reasons we will address later.
What is this grand mistake everyone seems to be missing? It’s the mistake of NOT building and maintaining a herd.
What is a herd? A herd for a business is a social grouping list of ardent customers and fans that have bought your product, and are highly likely to buy again. In fact, some might not even have bought your product yet, but are extremely supportive of your brand and will buy when given the opportunity, like overseas fans.
Every business needs to build it’s herd and guard it like your crown jewels. Repeat customers are a business’ life stream.
So how do we go about building a herd? Facebook fans, Twitter and Instagram followers, Tumblr followers, these are all examples of a herd base and are widely used by most businesses. Note however, that the metrics in these social media sites doesn’t mean you have a responsive and loyal herd that will purchase. For example, someone might be a fan on your Facebook page purely because you had 1 nice photo, but never ever buys from you. So be wary of buying ads to gather fake’ fans. In addition, the new Facebook algorithm only on average lets 12-16% of your fan base to see any post you make.
Fans and followers do not mean assured buyers. And any business would rather have $10,000 in sales with 100 Facebook fans, than $100 sales but 10,000 Facebook fans.
Now instead, what has proven to be the most effective herd building strategy, is building a mailing list, or a number list. A mailing list can be an email or physical address depending on your needs, while a number list is a customer’s mobile number.
Why a mailing or number list and not perhaps, a print advertisement? The simple reason is because it’s personal, thus open rates are much higher compared to any other media. People will read things that they know are directed at them personally. Customers need to at least read your message before being able to do whatever you ask them to do (like buy your stuff). In fact short-messaging-service (SMS) on the mobile phone has perhaps the highest view rate, although limited by the message length. Spamming marketing dollars on advertising to everybody, sells to nobody.
With a list, send an offer or promotion via email, via post or via SMS and you will convert a certain number of customers immediately. You can measure your results and test for the best message. The most effective list is of course made up of existing customers who have bought before and are highly likely to buy again. Once you have a big enough list of loyal customers and a decent converting offer, you take the uncertainty out of a retail business by being able incite sales any time you want.
So why aren’t business owners building their list?
Main reasons why business owners are hesitant or even resistant to build their herd list:
1) It’s not important
If you think it’s not important, think again. The biggest companies like Zara, Topman, Sushi Tei, Paradise group are ALL building their herds. It’s just not visible to the untrained eye. How are they doing it? With membership programs.
By signing on to their loyalty program, a customer is expected to provide his details, including mobile number, mailing address, email and a plethora of other personal details that can be used for segmenting customers. And once the company has this detail, they start periodically sending discounts and promotions via the channels given.
2) It’s too much trouble operationally
Collecting as many individual customer’s name, address, phone number might seem like a lot of work, and the truth is, it is. It is the toughest for physical retail businesses, as compared to online businesses which can convert with online opt-in forms that customers fill themselves. Restaurant diners on the other hand, will require a slower and more tedious process of going to individual customers one by one, face to face to harvest data. Developments in technology has made it easier though, like using tablet computers to allow customers to fill in their details straight to the online database, instead of using paper and pen then entering the data later on.
However, if you have gone to the trouble of searching for information and resources to improve your business, then don’t be lazy. Whatever needs to be done to increase your business, has to be done. Period. Collect your list in whatever way possible if you want to build your business successfully.
3) Customers might not be willing/dislike to give their details
Yes, most people will not give their information out. For Free.
Everyone needs a bribe to do something, and in the example above, a loyalty program is a perfect excuse to collect information. Provide your personal contact details, and you get a discount. Win-win. And with their contact details, you can sell your herd even MORE stuff. win-win-win. Most sign up forms will ask whether customers would like to receive promotions and discounts, and once permission is given to sell, your chance of the promotion working sky-rockets.
However, a small group of outliers might still be reluctant to give any details regardless of a bribe (or the bribe wasn’t enticing enough), but we must be willing to accept such losses if you are still converting a good number of prospects to grow your list.
4) The item I am selling normally doesn’t request any information exchange
This is a common struggle for fast moving, consumer items. The general psychology is that the more expensive a product is, the more details a customer is willing to disclose. Like buying a new car, you pretty much provide all personal details down to your ex-wife’s name as if it were 2nd nature. Small items however like a slice of pie, have a long standing perception of purchaser anonymity.
Just because no one does it, doesn’t mean it can’t be done. Marketing programs for categories that normally don’t utilize such tactics, can still be cross-marketed. Starbucks for example, brilliantly created a loyalty card that returns e-credit to the card-holder for every coffee purchased, so that caffeine drinkers can buy even more overpriced coffee again. Definitely not a common coffee shop tactic, but a brilliant way of creating their herd. Obviously, signing up for this card requires you to provide information for their herd list. Creativity and using herd building tactics from other industries will provide a solution.
What do do with your herd?
When you have this herd list, you can easily create repeat customers by simply sending them an offer. Generate sales by just writing an email and pressing send. It’s that simple. The problem with a majority of promotions is that people are unaware of them. The promotion is attractive, but if it doesn’t get seen it’s as good as shouting at clouds.
So how do you build a list for your retail business? Read my article “5 Tips to build a mailing list for your retail business” and find out.
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