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Your EnterQuest Bulletin - Issue 279
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| Thought for the week: "I rob banks because that's where the money is." Willie Sutton |
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In this week's issue:
The key to understanding your customers
So you have a great product and business is ticking over ok, but how can you make sure that your very best customers are buying as much as they can?
The answer is segmentation. This is the process of dividing your overall customer base into similar sub-groups of customers and prospects.
The most common form of database segmentation is based on buyer behaviour, which takes into account how loyal a customer is. The database can be profiled by customer, based on how recently they have bought, how frequently they have bought and how much money they have spent. For example:
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Loyal customers - These are your customers who buy regularly. They spend at the higher level and have bought recently. Although these customers may only account for 20% of all your customers, they will probably account for around 80% of your turnover. With this grouping, messages such as 'we really love your custom' or 'As a loyal customer we want to give you something in return' would be appropriate.
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Seasonal customers - These are customers who buy with each new season, when new products are introduced. In this sense, their behaviour can be predictable and so have a different behaviour to your loyal customers. Where a loyal customer communication could be effectively executed three or four times a season, seasonal customers may only need one or two communications, so cost savings can be made.
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Sale customers - More often than not, this group of customers would have been acquired during a sale and so they are only likely to buy during sale times, when your products or services are discounted. Although not as valuable as loyal or seasonal customers, this segment is still important enough to ensure they are communicated to in their own way. For example, they may be interested in a new product at an introductory price, but are unlikely to respond to a new product launch.
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One-off customers - This segment can be the most difficult to understand, as there is limited data about their preferences and history. It could be that this group have made a transaction and then been unhappy with the product or service they received. Or it could be that they were lured by a competitor with a better offer. To maximise response, your communications should show some relevance to this group. Perhaps offer them free postage and packaging if they make a second purchase.
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Gone-aways - This group of customers could have similar reasons for their behaviour as one-off customers. However, in this group they could have bought on several occasions in the past and so are potentially more valuable to you, and it is more likely the case that they have received some sort of poor service or have gone to a competitor. To maximise response with this segment, communication could be tailored around 'we miss you' or 'you haven't bought in a while, so we thought we'd send you this great offer to remind you'.
This tip is an extract of an article from EnterQuest's sister publication, BETTER business magazine. Subscribers to the magazine can read even more articles to help them run a better business, including:
To receive a free copy of BETTER business magazine simply send us your name and address to enterquest@cobwebinfo.com, putting 'EQ magazine offer' in the subject box.
Each week we provide you with summaries of some popular or emerging business ideas in the UK and elsewhere around the world.
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Webkinz. Webkinz are toys that come with a unique code allowing the owner access to the Webkinz virtual world, where they can care for their pet and interact with other Webkinz users.
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An Etsy equivalent for foodies. Lovers of handmade goods can use Etsy to sell and buy all kinds of handmade clothing and accessories. Now there's an equivalent for lovers of artisan food. Although not fully launched, Foodzie is a site where food producers can sell their wares.
Regularly improving your vocabulary is not just about learning a new word and its meaning. It will improve your general knowledge and make you feel and act smarter in all sorts of personal and business situations.
Do you know the meaning of the word 'auspicious'?
a) highly suspicious
b) indicative of success
c) discouraging
d) inventive
Answer at the end of the Bulletin.
The following topical business issues have been recently reported in the media. Did your radar pick them up?
1) The smoking ban has been a major reason for a business in Scotland going into administration. What type of business is it?
a) an MOT garage
b) a dry cleaner
c) a bookmaker
d) a newsagent
2) Retail sales finally picked up in August, according to information services provider Experian. In particular, shoppers splashed out on which types of items?
a) outdoor furniture
b) sports and fitness goods
c) back-to-school clothing and footwear
d) stationery in anticipation of new school and college terms
3) Recent research by the Small Enterprise Research Team (SERTeam) at the Open University has revealed that over half of small businesses owners will take which action if the current economic uncertainty continues?
a) reduce their marketing budgets
b) take a pay cut
c) introduce a recruitment freeze
d) operate from home
Answers at the end of the Bulletin.
Free word-of-mouth e-book
This free e-book, by Dave Balter and Seth B Minkin - both from the BzzAgent word-of-mouth network - is packed with hints and tips on how to get the most out of word of mouth marketing. It's available to buy from Amazon but it's also free to download in its entirety from a number of blog websites.
Exhibition dos and don'ts
This handy article from Clip Ltd contains useful information for businesses attending or thinking of attending exhibitions and trade shows. The dos and don'ts link to other articles on planning your stand, how not to exhibit and setting your objectives.
Directors' guide to mobile working
This guide, from the Institute of Directors, is aimed at directors of small and medium-sized firms and contains practical information and guidance on mobile working. It covers the range of mobile communications options and how mobile working can give your business a competitive advantage. The digital version is free to download or you can pay £9.95 for the hard copy.
Download business documents with Simply-docs
Simply-docs is a website that contains standard legal and business document templates. You can subscribe to a number of options and prices start from £35 for a year's access. Alternatively use the free documents listed on the site. Registration is required to gain access to the documents.
Win a year's Vodafone 3G Mobile Broadband contract
EnterQuest has teamed up with Shimmer Telecom, an independent provider of telephony, data and IT services, to give a lucky reader a 12-month subscription to Vodafone 3G Mobile Broadband worth over £300.
A service ideal for use on your laptop, and requiring no more than a simple USB stick, the plug-and-play mechanism works with any PC or laptop, including Apple.
With the Vodafone mobile service, you can browse the web, access your e-mail and, if your machine is set up for it, use your PC as a phone using VoIP.
Shimmer is offering one lucky reader the chance to win a 12-month subscription. Just answer the following question:
Q. What does the acronym VoIP mean?
a) Voice-over Internet Protocol
b) Voice-on Internet Protocol
E-mail your answer, together with your name, address and daytime telephone number, using "Vodafone 3G competition" as the e-mail subject line, to enterquest@cobwebinfo.com.
All entries must be received by 30 September. EnterQuest and Shimmer Telecom will use the information you provide for their own marketing purposes only and your details will never be shared with any third parties (except to arrange delivery of the prize). Competition rules and terms and conditions for the prize are available on request.
This book helps business owners get the most out of their websites and effectively promote their business online. Written by Internet consultant Nigel T. Packer, it is full of insights, observations, techniques and strategies to help you maximise the sales potential of your business. Check out:
Just one word answer
The answer is b).
Auspicious means indicative of success.
The entrepreneur had an auspicious meeting with the manufacturer about his invention. |
How's your business radar? The answers
1) The answer is b) - Dry cleaning businesses are suffering from the effects of the smoking ban, as less people require garments to be dry-cleaned because they don't smell of smoke.
2) The answer is b) - Retail sales recovered slightly in August, especially in the sports and fitness retail sector. The Olympic Games in Beijing are thought to be a motivating factor behind the increase.
3) The answer is b) - The Open University SERTeam report recommends that managers increase their marketing spend and take a pay cut. |
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Good luck
The EnterQuest Team
This information is meant as a starting point only. Whilst all reasonable efforts have been made, the publisher makes no warranties that the information is accurate and up-to-date and will not be responsible for any errors or omissions in the information nor any consequences of any errors or omissions. Professional advice should be sought where appropriate. |
