Did you know that an over-reliance on a regular customer base is an easy crutch that all too many small business owners lean on? This is especially dangerous when you have one or two clients that are responsible for the majority of your revenue, because businesses that become too comfortable with only serving their regulars or do most of their business with only a few clients are often the most at-risk in the event of a downturn, or if those clients simply decide to go in another direction. Cultivating a more diverse portfolio of clients is one of the most effective ways to insulate a business from financial loss, increase cash flow, and spur on growth.
There is no universal answer as to how diverse a customer base ought to be. Depending on a business’s size, location, and industry, different customer base sizes may be sufficient where others are not. A general guide for businesses is that no one client or customer should account for more than 8% of your revenue. If your revenue has become too dependent on customers, or you simply think your business could benefit from some new clients there are several low-cost strategies for revitalizing your base.
Form New Business Partnerships
An effective means to increase your own customer base is to cross pollinate with another business’s base. Find a local company or service that is related to your own and find a way to incorporate them into your ecosystem. Partnerships aren’t only for large corporations. Local partnerships can go a long way to kick off growth in a shared community. An example of a good cross pollinating partnership could be a local business services firm and a staffing agency. Both businesses can benefit from new customers but are not competing in the marketplace. By exchanging their services or internal referrals, the two businesses can see growth among their two customer bases without competition.
To learn what partnerships may work best for your business, consider attending industry events and trade shows. One of the best ways to kick off a meaningful partnership is a personal connection.
Use Your Existing Customers as Advocates
Be sure to engage with your existing customers, as they are a helpful tool for acquiring new ones. A proven way to let your customers and clients bring new eyes to your business are testimonials. Online testimonials are often the first point of contact for a consumer with a new business. A good collection of testimonials can give authenticity to your brand at zero cost. Since testimonials are collected from existing customers and clients, the only cost may be adding a new line to business cards, flyers and receipts asking for testimonials. Engage your customers with inviting phrases like “Share your Experience” or “Let Us Know How We’re Doing.” “Contact Us” links and titles are so ubiquitous that they will often go unnoticed. Businesses can try to increase the number of natural testimonials by highlighting good reviews on their website and giving personalized responses to reviews on Google and Yelp.
Another key strategy for mobilizing your existing customers is kicking off a referral program. Referral programs incentivize customers like no other program because – when run appropriately – you, your existing customer and the newly referred customer all see benefits. Effective referral programs can be executed in a number of ways – from your basic word-of-mouth initiatives, to email and social programs, to larger scale programs run on software dedicated solely to customer advocacy programs. The most effective referral programs must have a legitimate incentive for both the original customer and the person they will hopefully pull in. This usually means discounts or cash value, but the cost of an effective referral program is still likely a fraction of an advertising or marketing campaign.
Step Out of Your PR Comfort Zone
A key element to diversifying is increasing your business’s discoverability. There are several free means to harness discoverability with the most prevalent being traditional news media. Get in touch with your local news station to make your business’s name known. Develop a relevant press list for your business that includes all related publications that may overlap with your industry. As a business owner, you have valuable perspectives that can also up your discoverability. Regularly look on websites like HARO (Help a Reporter Out) and see when your input as a business owner may help a reporter’s piece. If you are quoted, you can ask for your business to be attributed with your name.
Another modern avenue to increase your discoverability is interactions with bloggers and social media influencers. The most effective means to get in touch with Internet personalities is with social media. Make sure that your presence on Facebook, Twitter, Instagram, LinkedIn and even video platforms like Tik-Tok is unique and authentic. Reach out to bloggers with either an opportunity to review your products or tour your facilities. Engaging with the new world of independent media is one of the most certain ways to touch the emerging Generation Z consumer base, as the UMass Dartmouth Center for Marketing Research found that 97% of Generation Z uses social media.
Find Your Niche and Own It
Businesses that identify and engage with a niche audience have the best chance of pulling in more customers with the same interests. A niche market is essentially a smaller section of a larger industry that shares a trend. One of the best ways to capitalize on a niche audience is to determine your most popular product or service and brand that as your specialty. It is, however, essential that consumers associate you with a certain product or service niche. It is up to the business to effectively market their most popular product or service in an effective way that can pull in even more interest. Find out what services your competition is not offering and see if you can fill the space.
An example of effective niche marketing can also be putting a spin on your business to separate you from your competition. Marketing yourself as the most eco-friendly or the most supply-line conscious option has the best chance of associating you with like-minded customers and giving yourself the advantage in a crowded market.
Introspection Before Diversification
Before starting new outreach strategies, it is important for a business to assess their own strengths. Think about why your current customers or clients choose to do business with you over competitors. Think about what your business does best. Once you have determined your business’s unique strengths, have them guide your marketing and outreach. Having concrete goals and targets for growth is one of the best ways to stay on target when taking on new projects like client diversification.
The most certain way to diversify your client base is to offer consistent and excellent service. While there are several ways to seek out new customers, the only way to keep them is through care and attention to detail.