In marketing terms, a customer is someone (individual or business) who has paid you for a product or a service. Even if they only buy from you once, you should consider them a customer.
Such a simple definition, but getting customers (and making money) is what every single business is about and it’s no wonder that all businesses spend incredible amounts of money, time and effort trying to convert people into their customers.
Marketing is the term used for all the activity that businesses do in order to get or create a new customer. There are whole reams of information available throughout the world on how to do this. So understanding the steps involved in taking a potential customer and turning them into a regular customer, will help you to implement your marketing more effectively and enable you to track the results of your activities.
Have you heard the statistic that it takes an average of 7 contacts with a potential customer before they will consider becoming a customer? If you have then you will understand that it will take more than one advert or one newsletter or one website visit to convert someone into your customer. And this is where having a prepared and timeline plan for your business is key. You can’t expect to do one thing – like send out a mail shot – and every one will turn into customers.
So, what stages does a potential customer (i.e. someone you have defined as being within your target market group) become a customer? Understanding these stages will help you know how to market to them at each point.
Well, they start off as a stranger. (Doesn’t everyone before you get to know them?) They know nothing about you or your business, possibly don’t even know that you exist. A stranger would include a first time visitor to your website or a recipient of your direct mail leaflet or a newspaper reader who has just seen your advert. So when you market to your target strangers, you need to be very clear and simple about your offering and your business, giving them one clear and simple action to take – that is, to move up to the next stage in your marketing or sales funnel.
Once a stranger has responded to your marketing and you have some information about them, they then become a prospect. A prospect is someone who is aware of your business, has seen some of your marketing and who has responded to that marketing. A prospect includes a newsletter subscriber or a person who has called for more information and asked to be sent a brochure. A prospect is aware of you and has given you permission to market to them. This is an important stage because here is where all your main efforts are targeted at getting them to become a paying customer. Ways of encouraging prospects to become customers is to build a relationship with them through your marketing, offer them special discounts and promotions, provide time limited, limited availability or exclusive offers etc. If they respond and pay you for your product or service they have then become a customer.
A customer is someone who has paid you at least once for your product or service. They know your business, understand your business, have experienced your business and hopefully approve and like your business. The trick here is to turn every customer into a repeat customer. If you can do that, then you are probably on your way to creating a loyalist or fan. Ways of encouraging people to become repeat customers or loyalists include referral programmes, loyalty programmes, special offers and discounts exclusively for them and ensuring that they continually receive the initial high level of attention and service that they got at the outset as well as the results they want from your business.
A loyalist or fan is a customer who is very emotionally involved with your business, tells others about you, and generally promotes you through word of mouth because they like or love your business so much. This is the final stage of turning a potential customer into an actual customer. This is not only the final stage, but it is also the most rewarding. In fact it is also the easiest in marketing terms. It takes less money, time and effort to get an existing customer to buy from you again, than it does to turn them into a first time customer from a prospect.
• The stages of turning a potential customer into an actual customer are: stranger, prospect, customer and loyalist.
• You can adapt your marketing techniques according to which stage each of your potentials or customers are at.
• You should aim to spend most of your time and effort turning customers into repeat customers and loyalists.
• You want your customers to adhere to the 80/20 rule. That is, 20% of your customers provide you with 80% of your revenue and you should aim to spend 80% of your time exclusively marketing to that 20%.
By understanding the stages that your potentials and customers are at, you can be more effective at marketing to them and develop strategies specifically targeted to each stage. You also need to track all the enquiries that come into your business and maintain an up to date customer database. Start by making a list of all your current and past customers, then start tracking every single prospects ensuring that you stay in touch with them too.
