How can we create Raving Fans?
And let them do our marketing for us?
In this series of articles and associated webinars and workshops, by Roland Hanekroot you will learn the basic concepts and get the knowledge you need to become a successful ‘Business-Owner’, as opposed to a struggling ‘Business-Doer’.
The format of each episode in the “First Steps” series is to explain the basics of the topic and then in line with the principles of New Perspectives business development programs, to suggest some small simple “First Steps” you can take straight away to put the knowledge into action.
In this article we’ll look at your customers and ask:
How can we turn our customers into advocates for our business so that they’ll do our marketing for us?
There is an old maxim that says: ‘Your best and cheapest source of new business is in your existing customers database’
And that is so true. You know your existing customers and they know you; you know where they are and you probably know how to get hold of them and communicate with them already, and most importantly they’ve learnt to like and trust you already.
Well, I hope they do anyway.
Marketing boffins refer to the ‘Cost of acquisition’ of new customers, meaning what you have to spend to get one new active customer, a customer who spends money with you.
Cost of acquisition can include all kinds of marketing costs; advertising, Google optimization, brochure delivery etc etc, down to the cost of offering a free garlic bread with a first order of Pizza from the local Dominos.
Marketing is all about balancing the cost of acquiring a new customer against the money you stand to earn from that customer.
But encouraging an existing customer to do business with you again is nearly always cheaper than finding and acquiring a new customer, because all you have to do is to pick up the phone or send them an email or something like that.
So much for Marketing 101, but here comes the interesting part: Turning your existing customers into Raving Fans has the potential to reduce your marketing investments to near zero.
How does that happen?
Let me tell you a story
Once upon a time… a long, long time ago in a country not unlike Australia, Giuseppe owned an Italian restaurant in Sydney.
The restaurant employed some 20 people from kitchen hands to waiters and chefs and Giuseppe had owned the restaurant for about 5 years.
Giuseppe loved feeding his customers. The restaurant ran well and as far as Giuseppe could tell his customers were satisfied. The problem was that every time a new restaurant opened up in the area Giuseppe’s place dropped off for a while until clientele slowly started building up again. Every time Giuseppe was getting comfortable with his team and his turnover and his profit levels, there would be a new place in the street and for a couple of months Giuseppe would be losing money again.
‘It’s two steps forward and two steps back all the time’ thought Giuseppe
Giuseppe was ready to close up.
Working with me, Giuseppe came to realize that he needed to create a truly loyal customer base. A group of customers who were advocates for his business, Raving Fans. How do you create Raving Fans? By doing things for your customers they don’t expect, to always go one better, to truly make the customers feel at home and surprise them at every visit.
So Giuseppe turned the culture of the restaurant around. Ordinary customer satisfaction wasn’t enough anymore. Staff were trained to ensure they knew customers by name. To record customers preferences for tables and wines and dishes. Customer’s birthdates were recorded and free dinner vouchers sent to them on their birthdays. Every time a customer had dinner they’d be given some little surprise, from a free desert or after dinner drink, to a little bon-bon to take home or a voucher to give to a friend. Any time a customer wasn’t entirely happy with their dish or service they would be given it for free. Customers would be surveyed to find out about their favorite wines or dishes and Giuseppe would make sure that these preferences would be available on the menu next time the customer came and had dinner with him. A couple of tables would always be kept free for his regular customers so they wouldn’t ever need to book on forehand. Giuseppe started free cooking classes for customers and organised wine tasting tours for his regular clientele.
Now, a couple of years later, Giuseppe’s restaurant is always full. Every day of the week… people come from far and wide. Giuseppe hasn’t spent money on advertising or any other marketing than his initiatives in the restaurant. New restaurants arrive in the area and barely cause a blib on the radar. And best of all, Giuseppe and his staff feel that they have truly become part of the community and the community has made Giuseppe’s restaurant one of it’s institutions.
The restaurant is now consistently profitable
And Giuseppe and his very happy customers lived happily ever after… The end..
Lessons from Giuseppe
Giuseppe learnt to understand what it means to turn your customers into Raving Fans. Because when your customers are indeed Raving Fans, you don’t need to market to them anymore, they will be looking for opportunities to do more business with you. What business often don’t appreciate though is that the impact of turning your customers into Raving Fans is exponential.
Raving Fans will go out of their way to bring their friends and spread the word amongst their own networks. Raving Fans will also actively resist the attempts of the competition to win them over to their side. Raving Fans feel invested and emotionally engaged with your business and want you to do well.
There is a famous series of business management books written by Ken Blanchard, ‘The one Minute Manager Series’ and one of the books in the series is called ‘Raving Fans, why ordinary customer service isn’t good enough anymore’. Ken introduces a concept of ‘Plus One’ in the book, it’s short for ‘Find out what the customer wants, and deliver plus one percent’
The problem is that most businesses don’t take the trouble to find out what the customers really want and even if they do know they deliver inconsistently and certainly not more than the customer expects.
So if you want to reduce your marketing spend to near zero, commit to turning all your customers into Raving Fans.
Your business and your life will never be the same again… I promise you.
Take the first steps:
As mentioned in the opening paragraphs of this article, here are some ‘First Steps’ actions you can take right away, that will get you started on implementing the topics and principles of Raving Fans:
- Send a handwritten thank you card to your top 10 customers
- Invite your favorite customer to lunch/ afl game/ golf etc
- Do something outrageous for the next customer you talk to
- Talk to your staff and give them authority to go ‘beyond reasonable’ for their customers
- Investigate ‘net promoter score’ customer survey system
- Call one customer this week for feedback
- Implement a monthly customer survey system (incorporating the Net Promoter scoring system).
About the author and the Small Business Masterminds
Roland Hanekroot is the founder of New Perspectives Business Coaching and the author of “The Ten Truths books for business owners”
To support small business owners take the first steps to building a business that sustains them for years, Roland runs a series of regular webinars called The Small Business Masterminds Foundation webinars. There are three different Foundation webinars, on Time Management, The Purpose of Business and How to have more Fun in Business.
The foundation webinars are totally free and you can find out more and register for the next one here: http://smallbusinessmasterminds.com.au