Achieving Big Customer Loyalty in a Small Business World with Manta

Thank you for joining our 2014 Small Business Week webinar. Achieving Big Customer Loyalty in a small business 10 tips to create a Killer Customer Loyalty Program. My name is Eddie and I'll be moderating today's session. At this time, I would like to formally begin today's webinar and introduce Bridget Pollat from score.

Hello. Thank you so much Eddie. And thank you all for joining us today. I hope you are enjoying Small Business Week, learning a lot, networking and getting the information that you need to become even more successful. I want to start off today's webinar by letting you know a little bit about score. We are a nonprofit organization that is here for the life of your business, providing free mentoring, training and resources for entrepreneurs and small business owners. As I mentioned, we provide free mentoring that means one on one business advice, guidance, support, coaching, hand holding, whatever you need, whether it's in person, in your local community or online. We have been around for 50 years. This is our 50th anniversary that we're celebrating this year and we have served more than 10 million small business owners and entrepreneurs since our beginning. We are able to provide this free one on one mentoring through volunteers who have that been there, done that expertise. They've been in the trenches like you are. They've overcome the hurdles and obstacles and they have succeeded and they are giving back their time and their knowledge to help you avo those pitfalls and to achieve your dreams. We are a nonprofit resource partner of the United States Small Business Administration and we, along with the Small Business Development Centers and Women Business Centers are here to help you make sure that you have the resources that you need and the knowledge that you're interested in to achieve whatever goals you've set out to do. In our 50 years we have seen a huge impact on because of the people that have come through SCORE stores that we've helped. We have over 320 chapters somewhere near you in a community that you're already operating in with 11,000 volunteers across the nation. We also offer online mentoring and resources for those of you who either don't have an office right near you or like many of you, are very busy and don't have the time necessarily to meet face to face. So what do I mean that we provide mentoring? How does SCORE help? We provide experienced advice. Again, our volunteers are familiar with the journey that you are taking as a small business owner and we can advise you with unbiased, free, confidential knowledge on business planning, financial insights, marketing help, resource planning, hr, importing, export, all of those things and much, much more. Whatever your business question is, we have someone in our network of 11,000 volunteers that can help you, that can answer your question, help you feel more confident about going forward, make sure that you get the resources that you need and then helping you and being there for you to take that next step through the life of your business. Some of the ways we do that again are through this one on one mentoring. You can find the nearest chapter near you at www.score.org. you can also look for someone who's available via email to answer your questions. If you type in your business question, topic or industry, we have a list of mentors, volunteer mentors that are available and you can search them by topic so that if you want to send an email and get started that way, that's a good first step into score. We also offer a wide variety of educational sessions on a number of topics ranging from business planning to marketing. We have a number of facilitated networking peer sessions to discuss those critical business topics with people that are in the same boat as you and they're facilitated by a score. Again, we have thousands of online resources that have been vetted and reviewed by a number of people to make sure that they will help you and supplement the advice and guidance that you would be getting from your SCORE mentor. We are here to help you find success as an entrepreneur. The reason that we provide all of these is that you don't have to go it alone. I know that many times as a small business owner or an entrepreneur it can seem that you are in it alone and no one understands what you are going through. Well, SCORE is there to help. The mentoring provides improved chances for startup and success through the one on one business coaching that's unique to you. And again, let me reiterate that it's free, confidential and you can go and see your mentor for as long as you are in business. Workshops provide the training on critical topics in an environment where you're learning from the experts and also surrounded by like minded entrepreneurs. And the online resources again can be your playbook to provide those step by step outlines for small business strategies. So I encourage you all to get started today, whether it is with score, Small Business Development Centers, Women's Business Centers or some other trusted advisor. Get started, ask for help, ask for support. You will be more successful when you rely on the resources that are available to you so that you can achieve your goals and have less of a rocky path along your journey to small business success. You can get more information about SCORE@www.score.org and you can also find us on the SBA's website@sba.gov if you have any questions. I will be on. And with that I appreciate your time. Have a great rest of Small Business Week and thank you very much.

All right. Thank you very much, Bridget. We sincerely appreciate that. Now we we will move on to our featured presentation for today. Today's presentation will be conducted by Heather Harmon from Manta. Manta is the largest community for connecting and promoting small business. Heather, please go ahead.

Thanks Eddie and thanks Bridget and thank you to the SBA and SCORE for their support of small business Today. Manta wants to talk to all of you small business owners about ways to achieve big customer loyalty in a small business world through customer loyalty programs. Today we're going to talk about three different things. 1. The benefits of driving customer loyalty. Really? That stuff? Why should I be doing this? Why am I listening to this webinar? 2. Trends in customer loyalty what are other small business owners like me doing to increase their customer loyalty? And three 10 tips for creating your own customer loyalty program we're going to talk to you a little bit about how to get your customer loyalty program kicked off. Customer loyalty can bring big benefits to your small business. Existing customers not only comprise the majority of top line revenue, but can dramatically affect your business bottom line. It can cost up to 10 times more to acquire a new customer than to retain an existing one. Existing customers that have an affinity for a brand that love you already make it easier to upsell and cross sell them. There's a relationship they already know and like what your brand does. So there's a big measure of trust not afforded to an unknown company. New business development remains important, but acquiring new customers is more expensive and less lucrative than repeat business. According to the loyalty effect, a 5% increase in customer retention can lead to a 25 to even 100% increase in profit for your company. Furthermore, a repeat customer is going to spend up to 67% more than a new customer. Existing customers can also be leveraged to gain new customers, lowering the overall cost of your new customer acquisition. We see this today in digital word of mouth, such as customers posting reviews, checking in and posting stories and photos of their experiences with businesses. A loyal existing customer can be a brand champion to and a really important source of new revenue. Repeat customers are more likely to refer their friends and family to a business with word of mouth, online reviews and social media. Today, technology has amplified the reach of customers, making it even easier to share recommendations about a particular business. One Nancy Small business owner Carol Tadorovich said that owning her business was a lifelong dream fulfilled and that her first repeat customer was the biggest milestone for her as a business owner. Seeing that repeat customer gave her confidence and hope, and I'm sure a lot of you can relate to that. A new trend is developing as far as customer loyalty is concerned. The focus is less on customer acquisition, more on repeat customers. 61% of the small business owners that we at Manta surveyed reported over half of their annual income comes from repeat customers. Small business owners are also spending less time and money on customer acquisition. Only 14% spend the majority of their annual marketing budget to acquire new customers. Only 20% are investing most of their time and effort to acquire a new customer. This is a significant shift in behavior. Existing customers are definitely playing a more influential role in business success than new customers. Because of this shift, customer loyalty programs are starting to gain traction. Apps like Five Star Deli, Foursquare and RewardMe are focused on digital customer loyalty programs that can help your small business. Straight from Manta member Richard Foote of Oregon Crate Co. His company started using a digital punch card reward system powered by SQUARE to reward repeat customers and build a loyal customer base, and he's already seeing ROI on his system. This new focus from small businesses will help lead them to be successful businesses. So hopefully I've gotten you convinced to try a customer loyalty program. So where do you start? Manta recommends the following approach for small businesses Looking to Jumpstart a customer loyalty program. Before leaping to the tactical applications of a loyalty program, you should start with the desired outcome in mind. Clearly define your goal and what you want to achieve from a customer loyalty program. Be specific. Be measurable. Saying you want more business is too broad, but a goal of decreased customer churn, increased average order size, decreased cost, or improved acquisition. All these are much more specific. Quantify that goal and add a timeline such as Decrease customer churn by 20% in the next 18 months. If the goal is to decrease churn, for example, the loyalty program may include an incentive to sign a longer term agreement or contract for a monthly service. Another example is if your goal is to improve your customer acquisition, your program could incent your existing customers to refer your business to their friends and family. Tip 2 Determine your audience the next step is to determine who's going to be eligible for your program. Will it be everyone or just your best customers? For example, you may want to target customers based on spending thresholds, purchases per year, or even specific products you have. The upside to a more targeted group is that you're going to be rewarding the ideal buying behavior of your customers and subsequently then you're going to be driving more of it. This would also enable you to segment and reward your highest profit customers. Tip 3 structure your program to be ROI positive Once the primary goal and your audience are selected, it's important for you to determine the loyalty program structure. Setting this up at the onset better enables your business to delight your customers. Encourage them to buy more in the future and ultimately drive a positive return on their investment. Will the program be points based or have a tiered reward structure? Lay out multiple programs that can meet your goal. Then determine how much are they going to cost you and your business and how much will they net in return and then pick the one that fits your business best. Encourage your customers to opt in to your customer loyalty program Giving customers multiple options for joining the loyalty program program. Whether it's from your website, through your social media channels or even from the point of sale. It's important to driving adoption. Track your opt in list in an Excel file or within a customer relationship management system or CRM. There are many lightweight, low cost solutions like Zoho Base Pipeline Deals that will allow for easy upload of your opt in list. These can also serve as a platform for managing your future communications via email or in person. Tip number 5 Automate Automate Automate Let me say it a few more times. Automate Automate Automate There are so many ways to automate your loyalty program. The more automated it is, the easier it's going to be for you to manage and maintain it. Using automation does not mean that your personalization is reduced. Business owners who participated in our MANTA study talked at length about the personal aspects that their loyalty programs have provided and the importance of personalized service as being the competitive advantage their customer loyalty program had. Depending on the type of program you select, there are many free and low cost ways to get started doing this. Tip number six all right guys, we're already halfway through email. Staying in touch via email is one of the easiest and most effective ways to kick off your loyalty campaign. You can start simple by creating a steady stream of communication around your program. There are many free or low cost email marketing solutions such as Constant Contact, Vertical Response and mailchimp. These systems have pre built templates for you or you can even customize templates to closely reflect your brand. All right. Tip seven Go social. I know you guys hear about this a lot, but I'm going to hit on it one more time. Social media can be an extremely effective way to engage your existing customers. Start by first understanding where customers already are engaged in social media Facebook, Pinterest, Foursquare and launch your social engagement from there. Once you've selected the right network or networks, it's important to build up your social community through varied continuous content and engagement, creating many options for sharing and referring. Just as a side note, we at Manta believe that social media is best for retaining relationships with current customers rather than pushing to drive new ones. Tip Number eight Let's Get Integrated as you are progressing down the road with your loyalty program, you've implemented these other tips. You're going to want to consider more integrated and automated services like apps from Deli or Five Stars, which will allow you to automate your email, mobile and social communications from one interface. Saves you time. These types of services also enable you to track your customers activities such as their total points or if they do check ins or whether they're redeeming their rewards. Tip number nine Going Mobile There are a number of mobile apps such as RewardMe that your business can leverage to reward customers for positive habits. Apps like this use mobile phone numbers to track and distribute rewards. Spend Go, for example, will reward customers based on purchases and can be used at your point of sale. Another app, Front Flip, connects directly to Facebook and Twitter so that your customers can share your business's favorite promotions with their friends. All right, our last tip guys keep Keep engagement with consistent communication. A business does not want to be out of sight, out of mind from your existing customers. It's really important to remain visible with consistent and relevant communications. Target your communications to your customers interests and preferences. This is one way that technology really can help you to be more rather than less personal. For example, you could send an email to customers who bought a specific product with information about a complementary product. CRM, email and automation provide information about your customers that can be leveraged to create personalized communication. Small businesses have a tremendous opportunity to increase the value of the majority of their business. Existing customers doing customer loyalty, though ineffectively, can be dangerous as not doing it at all. I'd like to open up the floor for questions. Try to be as broad as possible because we have many small business owners from many industries all across the country. All right, before I start taking questions though, Eddie wants me to let everyone know that we're going to have a recording of today's session on the SBA YouTube channel so I can also run through what apps we mentioned. I talked a lot about different applications, different services that that might help you get Started those free and low cost ones. So from a customer relationship management system, we talked about Zoho Base and Pipeline deals for email marketing. We talked about Constant Contact, Vertical response and mailchimp. Some of the apps we mentioned were five stars. Belly, Foursquare, Reward Me, Bend, Go Front, Slip Square. It was a lot. So one of the questions we just got was, how do I build my mailing list? How do I reach out and grow my customers to start with? So if you're just getting started, you can look to your friends and family, the people that you're already talking to, those first people that are walking through the door, that's who is now your customer base and that's who you want spreading the word about you. So be bold. Reach out and ask them to tweet about you. Take a picture with them and ask them to share it across their network. You're going to gather more people that way and you'll continue to grow. Oh, somebody asked me to define CRM. So a CRM is a customer relationship management tool. So some of the ones we mentioned, like Zoho Base, Pipeline, you may have heard of Salesforce. These are tools where you can put in information about your customers, their likes, their dislikes, things that they've purchased. If you have a long lead for sales, you might put in information about your communications with them. Email. That's what a customer relationship management system can do for your business. All right, One of the questions we got was what fun rewards are going to help me engage my customers. Now this is going to be really specific for what you do and what matches your industry. But Oregon Crepe company was offering one of their crepes. Obviously people come in, love their crepes. So if you buy 10 crepes, you can get more crepes for free. Another one is you could partner with other companies. For instance, if, if you have an order over a certain size, you get free movie tickets with that and you can contact your local movie theater to set up a deal for doing that.

Okay.

Someone was asking about whether or not you're allowed to use somebody's email. That's where we talked about opting into the list. You want to ask them before you start sending them information. If they want to give you their email, reach out to them. If they do, don't let the opportunity go to waste. Okay. One of the questions was, are there companies that aid in developing and maintaining a loyalty program? There are so many guys. I don't want to list off a ton for you right now, but like I said earlier, we've got five stars. Belly, Even Square has an integration. And that's one of the great things is a lot of tools you'll find aren't just specifically for customer loyalty programs. They'll be integrated into your email marketing or your customer relationship management system. So do some research, find out what's in your area. You can also do some of the bigger named apps out there, but find what's right for what the goal you've chosen is to then pick a matching management system or app. Oh, somebody had a really interesting question. Can our loyalty programs degrade or lower the reputation of your business? Their example was a fine dining restaurant. Now that really depends on your audience. Like we said earlier, you have to match what your audience, what behavior you're trying to get from your audience, from your customers. So I think for a fine dining restaurant, you're not going to give punch cards out. I wouldn't recommend that. But what I would recommend is having a system like maybe a credit card type system where it's like a VIP club. So that would actually increase the clout of your business because when people would come and they would show their VIP access card, they would have maybe a free dessert or get to sit on a separate area that's nicer in the restaurant or get preferred seating, things like that. So you can even for a fine dining establishment, increase your clout rather than degrade it. That was a really good question. All right, guys, I think I'm going to wrap up the questions for now. Again, this will be recorded and on the FDA YouTube channel for everyone to look for. Thanks everyone that joined Mance wants to thank you for your participation today and also being a part of our small business community. If you do have any other questions, we would be happy to follow up with afterwards@mantacaresanta.com and we'll try and get to all of your questions. You guys had a ton of really good questions and again, the specific to your industry ones are a little bit hard for us to answer on such a big platform. So thank you again for all the questions.

Terrific. Thank you very much, Heather. Thank you to our representative from score and thanks to all in the audience for joining us today. This concludes our webinar. You may now disconnect.