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Should you hire a lead gen firm

Should You Hire a Lead Generation Firm?

May 6, 2022/in Featured Stories, Sales and Marketing /by Vince Calio

Generating sales leads is probably the most important ongoing task to ensure the survival of your business, but doing so on your own can cost you time, and deplete your personal bandwidth. If this is the case, you may want to consider handing over that task to an outside firm that specializes in generating sales leads for businesses such as yours. 

Of course, hiring an outside firm will cost you, but it can also grant you peace-of-mind that specialists are handling the most crucial aspect of your business. Before you hire one, however, you need to evaluate your business to determine if this is an appropriate move for your current business situation. .

Dollars and Sense

The biggest question to ask yourself when deciding whether to hire an outside lead gen firm is: will it be cost-effective? Lead generation services – especially B2B – often charge you per lead or can cost you thousands of dollars per month. As a result, your customer acquisition costs (CAC) will be driven up. The hope, however, is that the cost of hiring a lead generation firm will be offset by increased sales resulting from the extra sales prospects that the firm is bringing to you. 

Due to the cost, however, lead gen firms are probably most useful to high-margin small businesses that sell big-ticket items or services: medical offices; accounting and law firms; car dealerships, real estate companies, etc. If the increased CAC is so dramatic that it forces you to raise the price of your products, then hiring a lead generation service is probably not your best bet. You’d be far better off putting in the time and effort to generate sales leads on your own.

While you may have the budget to hire a led gen firm, it doesn’t mean that your budget is infinite. Some firms will charge you per month, while others may charge you per lead. It’s important that you determine which pricing plan would make the most sense for you.  

If you’ve done the math and concluded that hiring a lead generation firm will benefit you, it’s crucial that you do your research and find out as much about them as possible beforehand to determine if they are the right fit for your business. 

#1 Do Your Due Diligence!

Like you would with any other outside vendor, you need to research any lead generation firm you might be considering. First, find out if they’re ranked by any credible business source. For example, Fit Small Business, an online resource for small businesses, offers reviews and rankings of the most popular lead generation firms. 

Also, go to each candidate’s website and look for customer reviews and find out if they have experience in generating leads in your particular industry or geographic location. Try to get an idea of their pricing and how they get their leads. These are the firms that have experience in knowing where to look for sales leads and how best to glean information from them such as income range and interests.

#2 Do They Produce Quality Leads?

Poor quality sales leads won’t do anything for your conversion rate and worse yet, land your emails or phone calls on spam lists. What you want, besides contact information, are prospective customers who can afford – and are generally interested in – your products or services. In other words, you want leads that will produce the highest possible conversion rate. Will the lead generation firm produce a list of prospective customers that have previously purchased products or services in your industry? Will the lead generation firm build a list from scratch, or simply give you a ready-made list? If they are offering you a ready-made list, that’s probably not a good option – it may contain outdated information, and the firm probably hasn’t weeded out all of the sales prospects who said no. 

#3 Make Sure They are Compliant

There are laws in place in the US, such as the CAN-SPAM Act of 2003, that regulate solicitation emails, and you need to make sure your lead gen firm is in compliance with them. The act requires marketing emails to be sent from a legitimate email address, and the subject line must pertain to the body of the email, among other things. If you are trying to sell to customers overseas, especially in Europe, your led gen firm needs to be compliant with the European Union’s GDPR law that regulates marketing and solicitation emails.

Not complying with these laws can lead to stiff fines and other penalties against your business, so it’s crucial that you inquire about this.  

#4 Set Specific Expectations

Transparency is key, so you need to be as clear as possible about the volume of leads and what types of leads you expect from them. Ask them what their definition of a quality lead is and how much they charge for that, as the definition of a lead may differ from firm to firm. Some firms consider a lead to be anyone who makes contact with them about your business, while others consider a lead to be someone who is willing to set up a meeting with you. 

You need to also find out what emailing platform and email address the firm is reaching out to prospects with. Make sure the messages that prospective clients are responding with show up in your mailbox – not theirs. This way, you don’t risk missing out on legitimate leads because the firm forgot to forward them to you. Make this crystal clear with the lead gen firm before you sign a contract. 

Make Sure it Makes Sense for You

Lead gen firms can be very useful in increasing your sales and client base, but keep in mind they are not for every business. You need to conduct a careful analysis of your business to determine whether hiring such a firm will be cost-effective and make sense for what your business is trying to accomplish.

https://kapitus.com/wp-content/uploads/blog-lead-gen-company-2200.jpg 1468 2200 Vince Calio https://kapitus.com/wp-content/uploads/Kapitus_Logo_white-2-300x81-1-e1615929624763.png Vince Calio2022-05-06 05:00:222022-05-06 15:35:44Should You Hire a Lead Generation Firm?
Employee gives bags to person

Customer Loyalty: Action Loyalty and Tips to Achieve It

May 3, 2022/in Featured Stories, Sales and Marketing /by Brandon Wyson

Action loyalty, in short, is the grand culmination of cognitive, affective, and conative loyalty blasting in a crescendo emblematic of what most business owners would consider true loyalty. To achieve action loyalty with your customers is to reach a true synchronicity with the human who is patronizing your business; your business is a piece of their personality and a proud piece of their outward preferences. Forming action loyalty with your customers is perhaps one of the strongest forms of security for your business, as customers who exhibit action loyalty are the most likely to come back to your business out of respect for you and your brand.

What is Action Loyalty

In his study “Whence Consumer Loyalty,” Dr. Richard Oliver describes action loyalty as the “commitment to the action of rebuying.” And then in many more words, Dr. Oliver explains the key signs of action loyalty exhibited in consumers: action loyalty exists only in customers who have already bought/experienced your product and then actively choose your product over other choices in the same field. For example, A business is closed on Sunday. Then, on a Sunday, a customer arrives at your business seeking a product they have purchased from you in the past. Seeing that your business is closed, a consumer exhibiting action loyalty would then wait until your business is open again to purchase/experience your product specifically. Consumers who lack action loyalty to your brand would go somewhere else to get what they need on that same Sunday.

Action loyalty is exhibited both in the tendency to repurchase as well as the tendency to turn down alternatives to a certain product. Consumers with action loyalty would inconvenience themselves to patronize your business again.

Tips to Achieve Action Loyalty

 

Establish a Niche

Being that one of the key elements of action loyalty is the preference for your product over others in a similar space, it is essential that your products and brand do something all their own. Or more specifically, your customers need to earnestly believe there is something special inside your product or brand. More often than not, this means establishing and cultivating a niche within an existing industry. Your goal, in a way, is to find a subset of customers or a subset of an industry in which you can heavily gear your products, brand, and whole outward appearance toward catering.

A great example of niches lies in the music industry. Consider niches like genres; it’s all music, but a genre is a demarcation for a style or like-minded feeling. Every industry has its own genres. For example, bakeries that make specialty products or cater to specific crowds like vegans, pet owners, or people with food allergies are taking advantage of a niche. In the case of all three of these demographics, traditional bakeries likely do not suit their needs outright, so a bakery that goes out of its way to suit their needs is implicitly more attractive. Simply having the tools to cater to a niche, however, is only half the battle when seeking action loyalty; use all the tools in building cognitive, affective, and conative loyalty to build a customer relationship and action loyalty will hopefully come about as a result!

Know the Alternatives Your Customers May Seek

To have your brand chosen over alternatives, you must know those relevant alternatives inside and out. America is known for its variety of choices; this likely rings true for your specific industry as well as most other industries that would seek action loyalty in their customers. Take it upon yourself to follow the footsteps of how your potential customers may interact with your business. Then, see what other competitors show up on that same path. Whether simply Googling “pipe fitters near me” or genuinely interacting with your competitors to understand their unique appeal (or even pricing), consider that action loyalty usually follows common sense: if there is a near-identical product vastly undercutting the price of your own, you need to give customers the cognitive incentive to believe your product is superior.

Action Loyalty is Bound to Strong Brands

Distill the benefits of patronizing your business and associating with your brand into tangible, relatable terms. Sit down with trusted staff and management to find if you already have an existing trend among your customers you can emphasize. If not, go out of your way to develop one. Action loyalty requires customers to turn down alternatives in favor of your brand and product, so imagine this: a densely populated urban area has several competing grocery stores. Groceries aren’t a specialty service, so it is up to each store to build loyalty with their customers or lose them to very local competition. Each store ought to ask themselves “who already shops at my store” or “who do I want to shop at my store?” Whether you are the discount store, gourmet store, import store, health food store, or any other tangible style of store, having and holding that specific brand appeal is the basis of action loyalty. This example extends far beyond grocery stores and the general lesson is simple: action loyalty attaches itself to strong brands.

Routines and Rituals

Attaching and including your business in the daily routines and rituals of your customers is a veritable fast track to action loyalty. This is more specific (and emotionally bound) than the act of conative loyalty. Conative loyalty simply implies that customers return to your business after an initial transaction but intertwining with rituals and daily routines means that a business is part of a customer’s preferred daily path and routine.

Capitalizing on existing rituals and routines varies widely by industry; each industry has different expectations as to when their customers ought to come back. Consumer repair technicians, for example, aren’t likely to find their way into the daily or weekly routines of their customers… but that doesn’t mean they are wholly out of the action loyalty game. Our dentists and doctors are deeply intertwined with our semi-annual rituals. Take a note out of doctors’ and dentists’ books and find tactful ways to schedule future visits and check-ins with customers. At first, this is nothing more than conative loyalty. But over time and repeat positive experiences, this is one of the most likely paths to develop action loyalty.

Loyalty is Your North Star

Action loyalty is perhaps one of the most tangible examples that a customer prefers your brand over another. While cognitive loyalty is the basis of knowing a product is more premium, this says nothing about the customer’s individual preferences. On those preferences: affective loyalty means that a customer positively associates with your brand but says nothing about their willingness to patronize your business. And conative loyalty expresses, indeed, customers’ willingness to come back after an initial interaction but action loyalty trumps all: even if the customer is personally inconvenienced on the road to get your product or patronize your brand, they still do it.

https://kapitus.com/wp-content/uploads/iStock-1308840407.jpg 1466 2200 Brandon Wyson https://kapitus.com/wp-content/uploads/Kapitus_Logo_white-2-300x81-1-e1615929624763.png Brandon Wyson2022-05-03 17:24:332022-05-03 17:24:33Customer Loyalty: Action Loyalty and Tips to Achieve It
Woman gives woman tray

Customer Loyalty: What is Conative Loyalty & Tips to Achieve It

April 22, 2022/in Featured Stories, Sales and Marketing /by Brandon Wyson

When most people talk about “customer loyalty,” they often are actually talking about the more specific loyalty styling “conative loyalty” without knowing it. While there are several means to characterize “customer loyalty,” the loyalty most business owners desire is that which brings customers back to their business. Conative loyalty is an essential concept for business owners looking to improve customer retention, as understanding the concept is the basis of fine-tuning your operations to galvanize retention.

What is Conative Loyalty

Conative loyalty is the customer behavior of continuing to patronize your business. There is enough psychobabble to fill a book or two about conative loyalty, but the root of the concept is rather simple: consumers who willingly choose to go back to your business after a first visit are exhibiting conative loyalty. Unlike cognitive loyalty and affective loyalty, however, conative loyalty is shown in action rather than thoughts and opinions. Scoring conative loyalty with your customers is visible by the number of “regulars” and frequent customers or clients that patronize your business. So, the real game is not simply to achieve conative loyalty but also how to maintain it with your current customers.

 

Tips on How to Achieve (and Maintain) Conative Loyalty

 

Know Your Industry

The breadth of small business industries and styles means that there will never be a universal answer as to how to keep customers coming back; consumers don’t go to a coffee shop and a pool repair business for the same reasons. Maintaining conative loyalty and allowing new customers to form it will take some serious brainstorming between you and your trusted staff along with (believe it or not) feedback from your customers. Consider which of your products are most popular; in what ways can you change or improve that product to justify a reason for customers to make a return trip? Industries like auto maintenance or dentist offices that regularly schedule future appointments while customers are still in-house have it easy but that doesn’t mean the rest of the small businesses out there are out of luck.

Give your customers a tangible reason to come back to your business. For example, a coffee shop could encourage recycling by asking customers to bring their cups back from the last time they ordered for a discount on their next order. At its roots: use proof of purchase to incentivize future purchases. For industries where this would be more awkward (like the service industry) consider looking at your most popular products and seeing where it is possible to segment, separate, or improve existing services to necessitate a follow-up; just make sure this change doesn’t breed customer frustration.

Encourage Recommendations

Customer recommendations and reviews have an often-unspoken benefit beyond good press: customers who take the time to meaningfully explain their good experience are more likely to remember it themselves. Encouraging customers to write reviews online is a great means to allow those customers to feel out and articulate exactly what it is they like about your business. Then, they are more likely to remember those sentiments in the future! Online reviews, also, are not the only means to let customers speak their mind! Consider dedicating a space in your business to display hand-written, personal recommendations from your customers. Having their writing be physically on display in your business is another great means to build an emotional connection.

Customers who are enthusiastic enough about your business to write a review or recommendation outright are already exhibiting conative loyalty in spades but for the customers who haven’t reached that threshold yet, it’s up to you to convince them that your business is worth getting excited about!

Don’t Forget! Affective Loyalty Plays into Conative Loyalty

Affective loyalty, or the emotional loyalty held for a business, is likely the basis of building strong conative loyalty among your customers. Think about the concept of a “regular” in its own right: staff remember regulars’ orders, their names, and their preferences. That can only be formed through consistent, meaningful interactions with your best customers.

Go out of your way to train your staff about the importance of affective loyalty. You don’t have to sign them up for a marketing theory course; instead, get back to basics on the importance of even the simplest friendly inquiries when working with customers. The goal of your staff should almost always be to break the monotony and the base transactional undertones of doing business. If staff have a meaningful, memorable interaction with customers, you better believe they are on the first steps to building conative loyalty with your brand and business.

Reevaluate Business Pipeline Sections with Most Customer Interaction

Conative loyalty isn’t run by an off-and-on switch; every interaction your customers have with your business and brand will contribute to their perception of it, and by extension, their conative loyalty to your business. Think, then, about the elements of your business with the most customer or client interaction. Those elements must be maintained with unique precision to consistently impress (or, at the very least, simply satisfy) customers.

Conative loyalty is most likely to break down over repeated unsatisfactory experiences, so imagine the places where – in a worst-case scenario – your clients could be disappointed with their customer experience. If your business offers any kind of delivery services or meets customers at worksites, how long does it take for your employees to get there? If you don’t have a meaningful metric for this, that’s a good sign you should investigate transit times. How often do you train front-of-house staff about the importance of good customer service? This means more than sitting your staff down in the break room and saying, “be nice!”. If you want your staff to be memorable and pleasant to your customers, you need to make sure they are happy at work in the first place. This may require some introspection about your workplace culture at large.

Building a Conative Community

Conative loyalty is the eventual goal of just about all small businesses and for good reason; conative loyalty represents a customer’s genuine preference for your business over another and their willingness to act on that feeling. While cognitive loyalty in businesses is valuable, knowing that something is premium doesn’t mean that someone likes that thing or has any intention to patronize that business. And affective loyalty, as well, has its shortcomings: even people who like a brand don’t necessarily also have to go back and patronize those businesses. Conative loyalty is based on repeat action and is plainly visible in the faces of your regulars and most dedicated customers. In order to build that loyalty, then, consider the steps your business can take to both retain the regulars you already have and the steps you can take to excite and convince new customers to make your business part of their daily (where possible!) ritual.

https://kapitus.com/wp-content/uploads/iStock-1298224689.jpg 1468 2200 Brandon Wyson https://kapitus.com/wp-content/uploads/Kapitus_Logo_white-2-300x81-1-e1615929624763.png Brandon Wyson2022-04-22 03:43:172022-04-21 22:49:48Customer Loyalty: What is Conative Loyalty & Tips to Achieve It
Lead generation for small businesses

The ABCs of Generating Sales Leads: it Doesn’t Have to be a Costly Process!

April 20, 2022/in Sales and Marketing /by Bernadette Abel

No business, large or small, can survive without customers, and in today’s crowded marketplace, generating sales leads can be one of the most daunting challenges small businesses face. According to Hubspot, generating sales leads and finding customers are atop the list of the greatest challenges small businesses face, especially in an age where millions of products are being advertised and sold in marketplaces such as Amazon and Etsy. 

Finding potential customers, however, can be expensive and time-consuming. Paying for a lead generation service or going through the costly, multi-step process of setting up a booth at an industry conference may not even get you the quality results you’re looking for. As an SMB owner, your best bet is to make sure you are executing the ABCs of lead generation. 

Here are some basic steps that you can take to generate sales leads in a cost-effective way so that you can always keep your sales pipeline full. 

Maximize Social Media

Nearly all the people who want to buy your products are online and on social media, and you need to do everything you can to try to connect with all of them. LinkedIn, Facebook, Instagram, Twitter and TikTok are the most prominent platforms, but they all require different approaches to successfully connect to potential customers. 

Facebook does have business groups, but posts are generally personal in nature, while LinkedIn has a more austere business tone. Platforms such as TikTok and Instagram take a visual approach to attract followers that involves video streaming. There are plenty of free resources on the web, such as this informative article from SproutSocial on how to stand out on each platform. 

No matter which platform you’re using, it’s imperative to create a strong profile of your own that tells readers exactly what your business does and what makes it special, as well as letting viewers know what types of customers you’re looking for. Additionally, almost all social platforms have groups dedicated to what you do, so it’s important to make as many connections as possible, as well as monitor those groups and reach out to any posters that may seem like a potential customer. 

Scour Your Personal Network

Many small business owners don’t want to mix their personal lives with their business, and if you’re one of them, you’re making a big mistake. Your personal network of family members, friends, neighbors, current and past workmates as well as service professionals could be a hotbed for sales leads. 

Let those people in your life know that you’re seeking potential customers and be specific about your business and the types of customers you’re seeking. Even if the person is not directly a sales lead (and they probably won’t be), they could know of someone who is. Provide them with your contact information (if they don’t already have it) and ask them to forward it to anyone they might know who would be interested. Obviously, you want to approach them in a way that respects your friendship with them, but doing so isn’t as awkward as you may think, and you could be surprised at how many leads this technique could generate.

If at First You Don’t Succeed…

Sometimes when a customer doesn’t go through with a purchase, the customer may not be saying “no,” they might simply be saying “not now.” These include potential online customers who build a shopping cart but then don’t follow through with a purchase; or a customer in a physical store who asks questions about a particular product but doesn’t follow through with a sale. 

If you have a website, make sure it is set up in a way that compels them to give you their email addresses or other contact information. If your business operates out of a physical store, you could ask potential customers for their contact information in order to send them future sales or discount alerts. Another way to try and get contact information from them is to hold a contest in which they can only enter by giving you their contact information. For example, having potential customers throw their business cards in a jar and promising them a small prize if their card is drawn is often a successful technique. 

You may not make a sale right away, but if you’re persistent in contacting them with offers and alerts for your product, your efforts may very well pay off at some point down the line. 

Write Informative Blogs and Market Them

Adding a blog to your website will bring you a multitude of benefits, provided that you follow up with content marketing. You can scour social media and the web for topics in your industry that may interest your customers, then write short pieces offering them advice on how to solve certain problems, for example. This will get viewers to see you as an expert in your industry and perhaps an influencer. 

Of course, good articles won’t do you much good unless you engage in content marketing. Posting your articles to relevant groups on various social media platforms, for example, will get you some hits from readers who could be potential customers. If they respond with commentary on your articles, only allow them to do so if they provide their email addresses. If you’re not up on the latest content marketing strategies, you can get some free advice on the internet, such as Hubspot Academy’s free course on content marketing. 

Additionally, if you’re chock full of article ideas but creative writing isn’t your thing, there are several online services such as this one from Crowd Content, which allow you to hire an experienced freelance writer for a small fee. 

Host Webinars

Blog content is important in establishing yourself as an expert, but it often is a one-way street that doesn’t allow for interactive experiences with your potential customers. One way to solve this problem is to host webinars that allow users to comment and provide feedback on what you’re saying. Advertise a webinar on your website and on social media platforms, and have users register for it by providing their contact details. Pick an interesting topic and create a script on what you want potential customers to know. If you’re unsure of how to create a webinar, there are plenty of software packages out there that make it easy, such as Zoom Video Webinar and Zoho Meeting.

Network, Network, Network…

One of the best ways to find potential sales leads is to attend networking events, such as industry conferences, that are relevant to your industry so you can meet future customers face to face. Scour the internet and social media for networking events that seem like places where you’ll find potential customers. Sites such as Meetup.com and Eventbrite.com offer listings of events in your general area that may prove valuable to your business. Participation at these events is often free. 

When you go to these events, keep in mind that attendees probably don’t want to hear heavy sales pitches, so it’s important to approach people in a friendly, conversational manner. Go to these events armed with your business cards, grab a drink and have fun meeting new people!

Ask Your Current Customers for Referrals

Your current customers are great sources for sales leads because they already know and trust you. One way to encourage them to refer potential new customers to you is to offer them a heavy discount on your products or services if they do refer a new customer to you. That way, you can achieve the ultimate win-win by landing both a repeat and new customer simultaneously. 

Keep at it

When drumming up new sales leads, it’s important to be patient, as this effort might be slow at first and requires time and effort. Don’t get discouraged, however, as implementing one or all of the above strategies could pay off in a big way over time and keep your business going in the future. 

https://kapitus.com/wp-content/uploads/ABCs-of-Lead-Generation-Feature-Photo.jpg 1333 2000 Bernadette Abel https://kapitus.com/wp-content/uploads/Kapitus_Logo_white-2-300x81-1-e1615929624763.png Bernadette Abel2022-04-20 14:20:202022-04-26 13:00:39The ABCs of Generating Sales Leads: it Doesn’t Have to be a Costly Process!
magnet with rings and orb-bound folks

Customer Loyalty: What is Affective Loyalty & Tips to Achieve It

April 18, 2022/in Sales and Marketing /by Brandon Wyson

Loyalty can stem from several avenues of thought. While a consumer may be loyal to a company because of their belief that the company’s products are high-quality, that isn’t the sole means to build a loyal customer base. Enter “Affective Loyalty,” the second of Dr. Richard Oliver’s four stylings of consumer loyalty. While cognitive loyalty affirms the importance of loyalty through premium services, or simply the appearance of them, affective loyalty deals more so with the emotional background of loyalty; instead of just knowing the greatness of your brand, customers can also feel that greatness.

What is Affective Loyalty?

Affective loyalty occurs when a consumer truly likes your company. In that way, affective loyalty occurs in customers who have been uniquely affected by your business or brand. This, then, is much more difficult to centralize compared to cognitive loyalty. Case in point, consider Apple and American Express, the two key examples of brands with lasting cognitive loyalty in our previous article. Even though these brands are commonly known for selling high-quality products, that doesn’t mean that consumers necessarily like those products or that brand.

Small businesses have a leg up compared to their corporate counterparts when seeking consumer affective loyalty. While consumers may like the prices at big-name department stores, when was the last time you saw someone walking down the street wearing a Wal-Mart shirt who wasn’t walking to work? Affective loyalty is the underlying energy that gets a person to wear a branded shirt. People are OK with being seen out in the world with your logo – which likely also accounts for a bit of pride in being a patron to your business.

Affective loyalty is a gut feeling from consumers as to whether your business has their best interests in mind or are truly working on their behalf. Consumers can like something for near-infinite reasons, making affective loyalty the white whale for marketing teams and boardrooms worldwide. Two words frequently attached to affective loyalty are “satisfaction” and “emotion,” both of which are essential to forming affective loyalty among your customers.

Tips for Achieving Affective Loyalty

 

Be Yourself (No Matter What They Say!)

A sure-fire way to lose affective loyalty is to appear flippant or like a trend chaser. Think in the context of personal relationships; people can easily emotionally read when someone is altering their personality to please someone else. This rule remains true in business.

For a practical example, consider Chicago’s most foul-mouthed hotdog eatery: The Weiner Circle. The Weiner Circle stands in boastful opposition to every so-called rule of building affective loyalty. Customers can expect to be insulted and hurried along when buying hotdogs… but they’ve been coming back for decades. Customers can likely expect a tasty hotdog when they go to The Weiner Circle but that obviously isn’t the only reason the business is successful. The Weiner Circle has a tangible brand which consumers can emphatically like or dislike. While the Weiner Circle likely has its detractors, consider just as well that those detractors know and remember the business even if they won’t likely be customers.

Your goal as a business should be to cultivate a brand and a feeling for your business that kindles an emotional connection with your customers. “Cultivate,” however, doesn’t mean cull your current customers if you already have a company off the ground. Take the existing elements that excite and satisfy your customers and maximize them. While this may sound abstract (and it certainly is!) making your brand likable isn’t as simple as flipping a switch; if it was, every business would.

Involve Your Current Customers

If you are already running a business, there is a pretty good chance you have existing there are already customers who exhibit some level of affective loyalty for your business or brand. Take it upon yourself to find out why. Customers can like a business for more reasons than cheap prices, so find out why your customers choose you over the other businesses that could have suited their needs.

In this case, think of a hardware store operating in an area with big-name competitors nearby. It is near impossible to beat the prices of warehouse stores that buy in bulk to the tune of multiple million dollars a month, so how is it possible for a business to not only exist in that environment but also be genuinely liked by the customers who give their business to the store? Perhaps the staff is especially personable and knowledgeable about repair jobs. Perhaps, even if they can’t beat the prices of corporate competitors, the hardware store may offer to special order specialty parts for customers. Maybe it’s as simple as that the location and organization of the store is better than the warehouse stores. The only way to know, however, is to investigate.

While a business owner can speculate that any number of things bring customers into their store, customers are the only ones who can genuinely say why. Consider opening avenues for your customers to give feedback directly to your business. While running an online survey or other digital outreach options can give you a lot of results, surveys can lead to mixed bags in very small sample sizes. If you want your customers to genuinely like your brand, you ought to speak to them upfront. By being direct with your customers, you can expect more direct (and helpful) responses.

Community Involvement and Philanthropy

Transactions by their nature aren’t a good means to build an emotional connection with your customers. Rather, what happens in between transactions is likely the best place to cultivate affective loyalty. If your business has a brick-and-mortar location, put effort into getting involved in that local community. Call your town or city hall and see if there are any opportunities for your business to volunteer or donate to a community initiative. If your business is in a city with a community board, ask if your business can cater or sponsor the catering for an upcoming meeting. See, if customers think that their image of “good” is the same as yours, they are much closer to forming an emotional (and affective) connection to your business.

Consider making an easily digestible and brand-friendly act of philanthropy on a regular basis. A great example, in this case, is businesses in the food industry; restaurants and markets can offer to donate their extra food to a shelter, or in the case of restaurants, every time a customer orders a specialty dish, the dish’s equivalent ingredients are donated to a food bank. The purpose of this, of course, is to connect your business and brand with an act of goodwill that will make customers proud to patronize your business, and by extension, make them feel they are doing good.

Tempered Expectations and Informed Results

Being that affective loyalty is an emotional gauge, the gestures you make in your community will not resonate with everyone who could become your client or customers. That, however, ought not be your goal. Affective loyalty is best maintained in proportions: it is far more favorable to have several dozen dedicated customers with high affective loyalty compared to a larger customer base with general apathy for your business; the moment something more convenient or emotionally satisfying comes to oppose you, consider those customers gone.

Like many brand and marketing exercises, growing affective loyalty for your business doesn’t have a universal “how to” list. Instead, learning more about the concept allows business owners to tweak their operations and outreach with a new, informed perspective. So, with your scanner tuned to “affective loyalty,” take an outsider’s look at your business structure and consider new ways to not just serve your customers, but leave them satisfied.

https://kapitus.com/wp-content/uploads/iStock-1195869103.jpg 1320 2200 Brandon Wyson https://kapitus.com/wp-content/uploads/Kapitus_Logo_white-2-300x81-1-e1615929624763.png Brandon Wyson2022-04-18 15:47:232022-04-18 15:47:23Customer Loyalty: What is Affective Loyalty & Tips to Achieve It
ecommerce platforms small business sales Kapitus

Pros and Cons of the Most Popular eCommerce Platforms

April 12, 2022/in Featured Stories, Sales and Marketing /by Vince Calio

One of the most important questions small business owners face is “where should I sell my products?” With the Internet being the norm nowadays, it’s no secret that eCommerce is becoming the most predominant way consumers purchase products, especially during the days of the COVID-19 pandemic. If your business is part of the retail world but doesn’t use an eCommerce platform to sell, then your company is going to be left in the dust. 

Nasdaq estimated that 95% of all purchases made by consumers will be through eCommerce. While the electronic exchange’s analysts made that prediction in 2017, other studies since have indicated that eCommerce purchases will continue to dominate the way Americans purchase products. According to research firm Gartner, 30% of B2B sales cycles in the US will run through a digital sales platform, and AI sales assistants will replace in-person sales assistants by 2026. 

Online Marketplaces vs. eCommerce Platforms 

Online marketplaces such as Amazon Marketplace may be a better option for your business than an eCommerce store.

Small business owners should note that there is a difference between eCommerce and selling in an open marketplace and should carefully evaluate which one they prefer. While Amazon is the world’s largest online marketplace and Etsy, Facebook, Instagram and eBay are examples of  popular marketplaces for small businesses, they are not actually eCommerce platforms because you cannot set up your own store and sell individual products within these marketplaces. Instead,  you would be one of thousands of sellers.

Selling products on an online marketplace may be a better option for micro-businesses. Amazon and Etsy are among the most popular online markets for consumers, and selling your products on them will save you the time, effort and cost of creating and managing your own online store. 

On the other hand, you’re rolling the dice by selling on an online marketplace.No matter how popular the marketplace site, you’re not guaranteed sales because there really won’t be anything that makes your products stand out. You’re just going to be another vendor in a crowded marketplace of vendors.

Most Popular eCommerce Platforms 

If you are considering moving at least part of your sales to an eCommerce platform – which essentially is your business’ online store – or you’re a new small business that only wants to sell online, the most important question you face is which eCommerce platform out there is the right one for you and your business? 

There are several factors you need to consider before making that decision, including costs, the number of integrated sales/distribution channels being offered, and a realistic estimate of how large of a market there is for your products. 

Shopify

Shopify is one of the world’s most popular eCommerce platforms.

Shopify is arguably one of the best online sales platforms in terms of features and low transaction fees, especially for small businesses selling niche or unique products. The platform features multi-channel shopping and drop shipping so that you can sell your products through third-party marketplaces or directly from your website. It also offers Shop Pay, a payment processing system, and Shopify POS, a feature that can administer in-person sales. The cost ranges from $29.99 per month for basic Shopify to $299 per month for Advanced Shopify, plus you get a 15-day free trial and a custom domain name.

Pros:

  • Relatively low transaction fees;
  • Easy-to-use mobile app;
  • Built-in marketing tools;
  • SEO monitoring services, and
  • Shopify can integrate with other sales platforms such as Facebook, Instagram, Google, Walmart Marketplace, eBay and Amazon.

Cons:

  • The advanced Shopify package is relatively expensive, and
  • Shopify is prohibited in several countries such as Canada, Germany, Australia, Ireland and Italy, among others.

Adobe Commerce (formerly Magento) 

Adobe Commerce is highly customizable but does require knowledge of coding.

Adobe Commerce offers a powerful and flexible, non-hosted platform that enables small business owners to customize their online store to create a completely tailored experience for online shoppers. The platform allows users to sell across multiple channels, especially mobile platforms, add new brands and sites, expand globally and engage in both B2B and business-to-consumers transactions. The platform allows users to offer tailored promotions, and seamless multi-channel fulfillment options. It also has an integrated sales channel with Amazon Marketplace.

Pros: 

  • Not hosted – meaning that you, the business owner, are doing all the hosting as opposed to having the eCommerce platform serving as the host for you;
  • It’s free to start, and
  • It’s highly Customizable.

Cons:

  • It requires a deep knowledge of coding, since you’re going to have to customize your online store. If you’re not adept at computer coding, you will most likely need to hire a programmer and possibly a web designer;
  • Some users have said that it is not SEO friendly, and
  • It requires third-party extensions for online transactions.

Wix

Wix is easy to use but does have its drawbacks, such as costs.

Wix is a popular platform because it allows you to build your company’s website for free by offering customizable templates, domain name registration and web hosting. It’s easy to use, especially if your business’ website is for informational and marketing purposes only. For an added price, Wix also gives you the option to open your own online store and sell products. Its eCommerce platform allows you to track orders, process online payments, sell products on multiple channels and create campaigns to attract browsers who abandon their online shopping carts before making purchases. Its business basic plan costs $23 per month, while its Business VIP plan costs $49 per month. By installing third-party app Ecwid, it offers integrated sales channels through Facebook and Instagram.

Pros

  • Wix is easy to use;
  • Your eCommerce store is fully hosted, and
  • Wix provides 24-hour customer support.

Cons

  • Wix can get expensive because tracking and analytics requires a separate, paid plan;
  • Your online store isn’t transferrable; meaning, if you decide to abandon Wix and build your own eCommerce store, you’re going to have to start from scratch, and
  • You may have to use Wix branding in your sales.  

Squarespace

Like Wix, Squarespace is an easy to use website hosting platform with a built in eCommerce feature that’s easy to use, but does have some drawbacks.

Squarespace is a competing website hosting platform to Wix, and like Wix, it offers easy-to-use tools to build your online store. With some tweaking, you can pretty easily convert your informational website into an eCommerce store for a price. Squarespace’s eCommerce platform offers inventory tracking tools and the ability to sell subscriptions and gift cards in its higher-priced plans. It offers integrated sales channels through Google Actions, Amazon, Etsy and eBay. Its prices range from $26 per month to $46 per month.

Pros

  • Easy-to-use;
  • No transaction fees;
  • Strong Customer Support, and 
  • Professionally designed templates.

Cons

  • Limited multi-channel sales;
  • Limited phone support, and
  • Integrated pay options only include PayPal and Stripe.

Woo Commerce

Woo Commerce is easy to use and offers over 6,000- plugins and integrations, making it a popular choice for those seeking to build online stores.

If you host your own website and use WordPress to manage your blog content, Woo Commerce may be the answer for you, as it is essentially an add-on to WordPress. If you don’t already have a blog on your site, you probably should consider starting one. Put simply, Woo Commerce allows you to easily monetize your blog. Woo Commerce allows you to customize content with purchase orders by adding relatively easy-to-use drop and drag blocks to allow browsers to easily purchase your products after reading your content. 

Its features also allow you to easily manage email address marketing, shipping, payments, CRM and product management with multiple available plug-ins. Woo Commerce has integrated sales platforms with Google Shopping, Etsy, Amazon Marketplace, Facebook, Pinterest and Walmart. Its basic package is $30 per month, but it can get pricey as you add plugins and integrations.

Pros

  • Easy to use;
  • Open sourced and customizable, and
  • Provides over 6,000 plugins and integrations.

Cons

  • Since Woo Commerce somewhat limits you to selling through your blog, you’re going to have to invest in content marketing. There are content marketing courses available online such as this one from Hubspot, and
  • The costs for hosting, developing, maintenance and plugins can get expensive. 

PrestaShop

Prestashop is free and is a great tool for those with little computer knowledge or just starting out. It does have its drawbacks though, such as no customer support.

If you’re just starting out in eCommerce, PrestShop may be a very good tool for you. It’s a free, open-source platform for small business owners who are familiar with website building. PerstaShop’s tools include inventory tracking, online shopping cart, international selling and analytics reporting, plus control over privacy and security settings. It offers integrated sales channels with Amazon, Etsy, eBay and Facebook. Since it’s free, you can move on to a more sophisticated platform as your online sales grow. 

Pros

  • It’s free;
  • PrestShop offers global selling opportunities through payment option plugins, and
  • It’s easy-to-use.

Cons

  • It offers low-quality web designs; 
  • Does not offer customer support, and
  • Has limited scalability. 

Choose Carefully

Setting up your own eCommerce store will require you to consider a multitude of factors, including cost, whether you have the expertise to do so, and determining if your market is big enough to warrant selling your products online. You may choose to sell your products in popular marketplaces instead. Either way, you’re probably going to have to sell online, as that’s where the future of retail shopping clearly lies. 

https://kapitus.com/wp-content/uploads/eCommerce-feature-photo.jpg 1316 2000 Vince Calio https://kapitus.com/wp-content/uploads/Kapitus_Logo_white-2-300x81-1-e1615929624763.png Vince Calio2022-04-12 06:00:132022-04-12 14:57:01Pros and Cons of the Most Popular eCommerce Platforms
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Customer Loyalty: Cognitive Loyalty & Tips on How to Achieve It

April 8, 2022/in Featured Stories, Sales and Marketing /by Brandon Wyson

The one thing most likely to bring clients into your door (except a sign saying “Free Stuff) is some amount of customer loyalty. Customer loyalty is the lifeblood of a healthy business but there isn’t one finite way to achieve or cultivate it. The art of customer loyalty is as fluid (and sometimes fickle) as customers themselves; consider the wide variety of industries and equally wide variety of consumers in the world. There isn’t one way to pull in everybody but there are tried and tested methods sure to put your small business in the right mindset to cultivate customer loyalty. In celebration of customer loyalty month, join Kapitus on a weekly exploration of the most helpful concepts and theories used to bring about customer loyalty. To begin this series: let’s get heavy and understand “cognitive loyalty.”

What is Cognitive Loyalty

Cognitive Loyalty is a term created by Dr. Richard Oliver and explored in his marketing essay “Whence Consumer Loyalty?” published in The Journal of Marketing in 1999. In his own words, Dr. Oliver explains loyalty itself as “a deeply held commitment to rebuy or repatronize a preferred product/service consistently in the future, thereby causing repetitive same-brand or same brand-set purchasing, despite situational influences and marketing efforts having the potential to cause switching behavior.” Dr. Oliver goes on to explain four main types of consumer loyalty (cognitive loyalty, affective loyalty, conative loyalty, and action loyalty). In this article, we will be be talking exclusively about cognitive loyalty , touching upon the other categories in subsequent articles.

Cognitive loyalty is loyalty built by consumers’ own cognition; this means that consumers reason themselves that a certain product or brand is superior or premium. This type of loyalty extends to just about any kind of product you can think of. Here’s an example: Consumers tend to think that American Express credit cards and financing products are more elegant, premium, and all-around superior compared to other companies’ cards; another example is computers manufactured by Apple versus one of several other PC manufacturers. In both cases, companies in a space of exceedingly similar products (consumer credit cards and personal computers) through a magic slurry of masterful branding, digestible marketing, and several other tricks have grown a dedicated group of consumers who are exceedingly loyal to their products.

Consumers who exhibit cognitive loyalty have, in essence, convinced themselves that the product they align with is superior. Of course, a bit of helpful nudging from the source company’s marketing and customer service team can go a long way.

Tips to Achieving Cognitive Loyalty

Don’t Say it!

Cognitive loyalty is incredibly delicate and must be cultivated like orchids: with light, subtle nudges. If a consumer thinks you want them to think your product is superior, it’s more than likely they will take it the wrong way. Heavy-handed marketing doesn’t fly in the 21st century, so instead of buying a billboard that says, “We’re the Best,” consider, instead, ways to make your customers come to that conclusion on their own.

The IKEA Effect

There is a lot to learn from furniture giant IKEA, chiefly among those lessons is the marketing phenomenon that shares its name. The IKEA effect explains less so consumers’ loyalty to IKEA stores and more so their belief in the products themselves. Despite the reality that IKEA products are manufactured in similar environments and with similar materials to many of their competitors, consumers are consistently more connected with their IKEA furniture and products compared to others. Why? Because those consumers built the furniture themselves. Specifically, Harvard Business School found that 63% of consumers were willing to pay more money for furniture they had assembled themselves compared to similar (but pre-assembled) items.

This doesn’t mean that you have to run a furniture company to take advantage of the IKEA effect. The basis of the effect is the cognitive bias that a product or brand that the consumer helped build will likely become more favorable in their minds. A great means to get consumers involved with your business is to collect customer feedback and involve customers in your product creation process. The most essential piece, however, of collecting customer feedback is making certain customers know that feedback was both read and considered by your business.

The Better of Two Options (For Whatever Reason)

Think back to the two opening examples from this article: consumers often think Apple is superior to its competitors and the same is true for American Express compared to its competitors. This mindset doesn’t simply indicate that  consumers prefer Apple or AmEx, but instead that they prefer them over something else. Cognitive loyalty requires that consumers pick your product and brand over something else which they will inherently see as less premium.

The first step to becoming the better of two options is finding (and getting to know) your competitors and their products/services. In many industries, this is straightforward but may well require some abstract thinking for some others. Once you find a point of comparison, consider the ways your business is more attractive; this doesn’t strictly concern prices and rates! Modern consumers are interested in more than price when becoming loyal to a brand. Consider marketing your business as the more ethical of two options: investigate means to decrease your carbon footprint or highlights the ways in which your business is already doing its part e.g., recycling, higher wages, donations to charity. Of course, businesses risk sending the wrong message when marketing their ethical traits themselves. Reach out to your local newspaper or television news station to see if they are interested in writing about your company’s strivings to become more ethical; the goal is to have consumers understand that you are being ethical and environmentally conscious for the sake of it rather than for increased brand loyalty.

Cognitive Loyalty Through Introspection

Developing cognitive loyalty for your business and brand will never be a one-size-fits-all solution. Consumers shop at businesses for near-infinite reasons. Take off your business owner hat for a moment and think about your own cognitive loyalties. What companies, brands, or products do you believe are inherently superior to their competition? What brought you to that conclusion? What can you do to emulate that sensation? Sit down with your trusted staff and ask these introspective questions and you’ll likely be one step closer to finding how cognitive loyalty best aligns with your business.

https://kapitus.com/wp-content/uploads/iStock-942150078.jpg 1303 2200 Brandon Wyson https://kapitus.com/wp-content/uploads/Kapitus_Logo_white-2-300x81-1-e1615929624763.png Brandon Wyson2022-04-08 02:00:092022-04-21 14:40:54Customer Loyalty: Cognitive Loyalty & Tips on How to Achieve It
Website Sales Funnel Kapitus

How to Make Your Website an Effective Sales Funnel

April 7, 2022/in Sales and Marketing /by Vince Calio

Congratulations on creating a beautiful website for your company. Now that your site is close to going live, you still must take the most important step in developing it: by making sure the site itself is a “sales funnel”. In other words, does your site also serve as a step-by-step guide for visitors to make a purchase? 

A sales or purchase funnel is a marketing term that describes the customer journey towards making a purchase. It’s referred to as a funnel because at the beginning of the process, you typically start with a large number of potential buyers that eventually gets narrowed down to customers that want to make a purchase.

Basics of a Sales Funnel

Sales Funnel Kapitus

Credit: New Line Cinema. While you shouldn’t be as harsh as Alec Baldwin’s character in the hit film Glengarry Glen Ross, you do need to know the basics of a sales funnel to make your website effective.

A sales funnel for most businesses usually comes in four distinct steps: 

  1. Awareness – This is the step where you make the customer  aware of the existence of a product or service;
  2. Interest – In this step, you’re actively getting customers to express an interest in a product or service;
  3. Desire – Here, you are attempting to steer potential customers to a particular product or service, and
  4. Action – Encouraging visitors to take the next and final steps towards purchasing a product.

A good example is, if you own a retail store, an attractive storefront may lure in many potential consumers – that would be the first step (the widest part) of the funnel. Many of those potential customers will start browsing and be attracted to specific items – this would be the second step. For the third step, a sales associate will approach them, answer their questions and lead them to the fourth step, which is to make a purchase.  

How Does This Apply to my Website?

Your business website should do the same thing as your storefront in terms of being a sales funnel. If your website isn’t getting customers to make purchases, it won’t do you much good. Each page of your site should not only showcase what your business has to offer, it should also be guiding your visitors towards making a purchase. 

The first thing you want to do is to use payment processing software that makes it easy for customers to purchase your products. There are plenty of software packages out there such as Amazon Pay and Stripe that offer plenty of payment collection features for you to choose from. From there, there are several basic steps you can take to make sure your site will produce sales:

  1. Create a great landing page that brings in sales leads. We all know what they say about first impressions. Your landing page is the first page visitors will see and the first impression they’re going to have about your business. Your landing page needs to be visually appealing and showcase your company’s most popular products and services, as well as your mission statement, so that visitors will want to see more. It should also encourage visitors to sign up for alerts for new items, sales and discounts by leaving their email addresses. That way, you can generate sales leads for the future. 
  2. Immediately feature special sales or discounts for your products. It goes without saying that consumers feel good when they believe they’ve gotten a bargain on items that they purchase. Therefore, the next step in your online sales funnel should be to take advantage of this tendency by making a front-end offer (any offer that brings in new customers). This offer can be free shipping, deep discounts or claims that you are running out of stock on a particular item to create a sense of urgency for consumers to purchase that item. While it won’t guarantee a sale, presenting a front-end offer ideally will make your site visitors mentally go into purchase mode.
  3. Invest in AI sales assistance software. Step three in creating your online sales funnel is to

    AI sales assistants can make a big difference in making your website an effective sales tools.

    take advantage of the fact that customers are generally more likely to make a purchase when they’re given personalized service, such as someone being able to answer questions and negotiate a discount. While you can’t personally do that with every online customer, there are many AI sales assistance software packages that are affordable and can help potential customers with this. Good AI software should also alert you when a customer asks a question that it can’t answer. 

  4. Present upsell offers to customers right before they make a purchase. Encourage customers to consider upgrading or upsizing their orders with special discounts if they do so. For example, if your company sells frozen steaks online, let a customer know that they can also buy lobster tails for a discounted package price. If you sell clothes, you may wish to present an upsell offer by offering a matching shirt to go with a sweater that the customer is about to purchase. Again, this will appeal to the customer’s desire to get a bargain. 
  5. Present a “down-size” option. You don’t want t0 lose customers because they can’t afford your products. If you find out through your AI bot that this is the case, you may want to offer the customer a down-sized option – a cheaper alternative to the product they want to purchase but can’t afford to or aren’t willing to pay the price for. 
  6. Encourage repeat sales. If your sales funnel is effective and a visitor to your site does purchase your product, it’s important to remember to try and keep them as a customer. Afterall, customer lifetime value is a metric that represents the lifeblood of your business. Make sure that you keep your existing customer informed of any new sales or products that you are offering through email or text campaigns. There are plenty of great customer relationship management software packages out there that can assist you with this.

Keep it up!

Given how important your sales funnel is, you should always be evaluating it and examining ways to

improve it. If you see that your site isn’t attracting enough sales, you may have to make changes to both it and your business. 

With the economy being as volatile as it is right now, you may have to consider lowering prices or offering more discounts to attract more customers. Perhaps you should consider hiring a web designer to spruce up your landing page to make it more attractive to web browsers. Either way, developing a strong online sales funnel should be a crucial part of your business.

https://kapitus.com/wp-content/uploads/CYCI-6_Sales-Funnel-Feature-Photo.jpg 1549 2101 Vince Calio https://kapitus.com/wp-content/uploads/Kapitus_Logo_white-2-300x81-1-e1615929624763.png Vince Calio2022-04-07 14:58:592022-04-12 11:24:03How to Make Your Website an Effective Sales Funnel

Beyond Sales: How to Measure and Improve Customer Lifetime Value

March 24, 2022/in Featured Stories, Sales and Marketing /by Vince Calio

Acquiring new customers is certainly one of the most important aspects of running a small business, but SMB owners also can’t forget that keeping existing customers coming back is just as crucial to the long-term survival of their businesses. This is the reason why customer lifetime value (CLV) – the total amount of money you can reasonably expect from repeat customers over the lifetime of their relationship with your business – is often closely monitored by successful small business owners. 

Maintaining a strong CLV number is important for a variety of reasons. First, it can increase your profit margins, since it generally costs less from a marketing and advertising standpoint to attract an existing customer than a new one, since, ideally, existing customers have already had a positive experience with your business. Second, strong CLV puts your business in a much better position to thrive in the future since it is a strong indicator of future sales. Third, a weak CLV number can tell you the areas of your marketing and customer experience strategies that need changing and improvements. 

What You Can Learn from CLV

CLV allows you to:

  • Recognize your best customers. CLV will tell you which customers most frequently spend money with you and which ones spend the most per transaction. Knowing the profile of your biggest spenders allows you to conduct marketing campaigns in a hyper-targeted way, focusing on those channels that you know will reach those who have the potential to spend the most.  But beyond that, it can help you retain existing customers.  Whether you’re in the accounting or retail businesses, these are the customers that you probably want to offer special discounts to; provide individual customer service to; and to whom you would showcase the products or services you may want to promote more heavily. 
  • Improve Forecasting. By forecasting what products and services repeat customers may want over a future time frame, you should be able to effectively manage inventory and allocate marketing and sales resources. 
  • Segment customers. Calculating CLV allows you to categorize your customers into groups based on which ones are likely to make a repeat purchase. This will allow you to effectively tailor your marketing strategy and increase lead conversion rates.
  • Figure out ways to keep customers coming back. Most importantly, CLV will allow you to customize your marketing to encourage customers to make repeat purchases from your business. Remember, repeat business is essential to your future growth.

Calculating CLV

The simplest way to measure CLV is to multiply the average purchase price (aka average value) by the

Customer Lifetime Value

Calculating customer lifetime value could very well be one of the most important exercises for your small business.

average number of times a customer makes a purchase (aka average customer lifespan). This formula should apply if you are using CLV to predict your future sales flow, even if your sales are seasonal and inconsistent.

If you don’t have much in the way of sales history data, however, this formula may be tricky because you’re going to have to estimate both average purchase price and average customer lifespan. Guessing average purchase price and average customer lifespan will likely result in a high margin of error. 

How do Everyday SMB Owners Calculate CLV?

While the equations may seem complicated, and small businesses sometimes seek the help of outside marketing firms to calculate CLV, many have created a system that allows them to determine this number in-house. . Kapitus spoke to everyday business owners to discover not just how they calculate CLV, but the ways they try to improve it. 

Zach Goldstein, founder of Public Rec, says keeping your website appealing is key to maintaining strong CLV.

Zach Goldstein, founder of athletic apparel line Public Rec, said the best way to improve CLV for an eCommerce business is to examine and improve the pages on your website in which potential customers are leaving. 

“We use the average order value our customers buy annually multiplied by their average lifetime value to determine the average CLV for our business,” said Goldstein. “There are multiple ways to improve CLV depending on where users drop off in your sales funnel.

“The best way to increase CLV is to optimize your customer retention. First and foremost, this means analyzing your sales funnel to see at what step or event in the browsing process your users tend to abandon the site. From there, you implement strategic changes to your website design or in reaching out to the customer via email to gain feedback on what works.”

Chris Gadek, vice president of growth at billboard company AdQuick, said creating strong customer retention starts with personalized customer service.

“CLV shows how loyal customers are to your product and your brand,” said Gadek. “Creating a sentimental value between customer, product, and business increases revenue and retention. As a metric, you can describe lifelong customers as those who continuously interact with your platforms or continually purchase products from your website at a consistent pace.”

Prioritize Customer Loyalty Programs

Jason Sherman, founder of TapRM, says loyalty programs and retargeting ads are key to customer retention.

Jason Sherman, founder of TapRM, an eCommerce platform for craft beers, said the key to improving CLV is to focus on customer retention marketing. 

“Your RPR [Repeat Purchase Rate] shows how often customers make repeat purchases,” said Sherman. “To calculate it, first find the number of customers who placed an order, let’s say, in December. For that same month, find the number of repeat customers. Then divide the repeat customers by the total customers…You can improve your RPR through customer retention strategies such as an optimized customer life cycle, loyalty programs, retargeting ads, and cart abandonment emails. This creates a better post-purchase experience that drives customer loyalty and increases repeat sales.”

Brandon Adcock, founder of Nugenix, says discounts, special offers, and quality outreach marketing go a long way to obtaining repeat business from customers.

Brandon Adcock, CEO of Nugenix, which manufactures and sells men’s dietary supplements, also said that offering discounts and retention programs are key to the survival of his company.

“We measure our customer lifetime value by looking at their average purchases, both amount and frequency, and projecting that at a similar rate into the future,” said Adcock. “But importantly, customers aren’t static, and neither are businesses. Prices and products change, and the world of e-commerce is growing more competitive by the day. We build CLV by fostering long-lasting relationships with our customers through discounts, special offers, and quality outreach marketing that creates a positive image for our brand.”

Focus on Customer Onboarding

Steven Walker, CEO of Spylix, emphasized that a company’s CLV will automatically be strong if customers have a good initial experience. 

“We use the simplest formula for calculating customer lifetime value: the average order total multiplied by the average number of purchases in a year, multiplied by the average retention time in years,” said Walker. “Based on current data, this estimates the average lifetime

 value of a client. With data from specific categories, you may utilize this data to better focus retention and promotional activities.

“Introducing new clients to your business, explaining what you do, why it matters, and why they should stay” are paramount, said Walker. “Long-term client relationships need trust. Buyers will return if they feel your organization gives the greatest deals on their desired items. It works because building real relationships with consumers keeps them coming back.”

Build Your Future

Whether you own a law or accounting firm, or a construction or plumbing company, repeat business is crucial to the survival of your company as it ensures that customers will keep coming back in the future. While there are several ways to calculate CLV, at least part of your marketing and sales focus should be on encouraging customers to return. 

https://kapitus.com/wp-content/uploads/CLV-Feature-Image2.jpg 1268 1900 Vince Calio https://kapitus.com/wp-content/uploads/Kapitus_Logo_white-2-300x81-1-e1615929624763.png Vince Calio2022-03-24 05:00:462022-03-15 13:34:33Beyond Sales: How to Measure and Improve Customer Lifetime Value
marketing budget

Effectively Marketing on a Shoestring Budget

January 29, 2022/in Featured Stories, Sales and Marketing /by Vince Calio

If you’re like most small businesses, you don’t have the marketing budget to blanket the world with “15 minutes can save you 15% or more on car insurance” commercials, but it’s still essential to find a way to let the world know about your products and brand, even with a shoe-string budget.

Of course, you probably know the basics of setting a traditional marketing strategy which entails focusing on the four “Ps”: product, which entails both the goods and services your business offers; Price, which is the amount of money customers need to spend on a product or service that they not only can afford but will also make you a profit; Placement, which is how and where you deliver your goods and services to clients, and Promotion. You may also already have social media accounts and use Google Analytics or another web monitoring service to analyze your website. 

Beyond the basics, however, when you have a limited budget and personal bandwidth, you need to carefully pick and choose which audience you’re targeting and how to reach them most effectively, as well as think outside the box when it comes to how you promote your products and services. 

Target Carefully

Blanketing social media, radio, and television with posts and ads takes time, money and energy, and may not bring you the results you are looking for if you have not fully determined who your potential buyers are. Carefully analyze your products or services and determine who is likely to want to pay for them. Some of the factors you should be considering are:

  • Age – Is your product most likely to be used by a certain age group? For example, if you sell hearing aids, you may want to target the elderly population.
  • Income level – Make sure you are targeting the people who can afford your product or services. For example, if you own an expensive, gourmet restaurant, you probably won’t do well in a low-income neighborhood.
  • Marital or family status – Who in a family is likely to buy your products or services? 
  • Occupation – Would your product or service compliment customers in a particular professional field? 
  • Location – What region will most of your customers be in? For example, if you sell sweatshirts and winter coats, Florida would not be the region in which you would try to target customers. 

Go to Where They Are

Customer database software marketing

Customer database software can help you get a handle on your customers’ behaviors.

Once you’ve determined who your customers are, the next step is to find them. Analyze the attitudes, lifestyles and behaviors of your potential customers. You can spend part of your marketing budget on hiring a firm that offers customer analysis, or you can purchase customer database software, as well as third-party data. However, both options are quite expensive. 

There are ways you can conduct your own research on customer behavior and trends. You can do this by:

  1. Analyzing who is purchasing your product and why through online surveys. There are free online survey tools such as Typeform that can provide you with a wealth of information about your customers, including what they liked best about the customer experience and why your product or service is of value to them.
  2. Monitoring social media groups. If you sell pool supplies, did you know that Facebook has a chat group for pool owners? Did you know that Instagram has an entire group of users dedicated to hair care? Virtually every social media platform has specific, individual chat groups on which you can read what actual customers are saying about your industry. These will give you good insight into the attitudes and behaviors of your customers. 
  3. Watch your competitors. What are your competitors’ marketing strategies? Are they missing a niche market that you may be able to capitalize on?
  4. Analyze your company’s own data. You should regularly analyze your company’s user statistics such as blog subscription data, social media insights and product usage reports. While this will take time and effort on your part, it won’t cost anything. 
  5. Invest in third party data. While there are ways to launch a marketing campaign on a tight budget, it doesn’t mean that every service is free. You may want to make an investment in an outside firm that can provide you with general consumer statistics and trends in your specific industry. 

Where to Spend Your Marketing Dollars and Energy

With a tight marketing budget, your goal as a business owner should be to place your ads and social media posts to the appropriate audience with pinpoint accuracy. Some of the things you can do to make the most of your budget and time:

Find out which social media platform is best for you and post regularly. Creating a social media account for your business and posting regularly could be the best way to reach as many potential customers as possible at once. Post your thoughts, images or videos often. Keep in mind, however, that each social media platform has different demographics and unique styles that appeal to users for different reasons. A user may look to be entertained on TikTok and may seek informative business information on LinkedIn. Some platforms focus only on video content (YouTube and TikTok), so it’s important to get to know each platform. You may even wish to spend part of your marketing budget on social media analytics software to learn more about each platform.

Place ads carefully. If you decide to invest part of your marketing budget on radio, TV or internet ads,

Google ads marketing

Google ads is one of the more popular choices for small businesses.

make sure they are being seen by the right people. If your business is local, most communities have a cable TV channel that serves the community that may be right for you. If you are selling nationally and don’t have the budget to run a commercial on primetime network TV, you should consider internet ads which are markedly cheaper. Google Ads, for example, can help place your ads with different keyword searches. You may wish to spend part of your marketing budget on ad agency software to assist you.

Post strong content. If your business website does not yet have a blog page, you should include one. Writing strong blog posts about your industry and your products or services is a cost-effective way to market yourself, and it may cost you nothing if you’re willing to write blog posts regularly and share them on social media platforms. Doing so will make you an authority, strengthen your internal linking and hopefully get you back links on other blog posts or the media. Require that your readers subscribe to your blog by giving you their email address. This way, a blog can increase your sales leads.

Invest in a customer referral program. Did you know that, according to Boston Digital, half of the businesses in the US relied on customer referrals to get new clients? Creating a customer referral program won’t cost you much, if anything, and can be a powerful way to market your brand. Incentivize your customers to refer your business to friends and family with discounts or even cash rewards. 

Targeted Marketing is Crucial, but Doesn’t Have to be Expensive

Effectively marketing your products or services doesn’t have to cost you a fortune and, as mentioned above, can be done in a cost-effective way. While traditional marketing gurus recommend that at least 5% of your gross revenue should be spent on marketing, social media and internet advertising are proven, cost-effective tools to reach your potential customers that may not even cost you that much. While staying active on social media will cost you some time, it’s free. But, whichever way you decide to move forward when it comes to advertising, do your research on demographics to pinpoint the audience you want to reach.

https://kapitus.com/wp-content/uploads/Marketing-Article-Feature-Photo.jpg 1400 2100 Vince Calio https://kapitus.com/wp-content/uploads/Kapitus_Logo_white-2-300x81-1-e1615929624763.png Vince Calio2022-01-29 13:34:242022-01-29 13:34:24Effectively Marketing on a Shoestring Budget
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