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Isaac Hill
Isaac Hill

How To Gain Customers And Increase Profits With...

The campaigns ran for two months and within that period, BikeBerry not only increased sales, but they were able to widen their profit margins by not offering discounts that are too big to customers who would convert at a lower threshold.

How to gain customers and increase profits with...

Francesca Nicasio is Vend's Retail Expert and Content Strategist. She writes about trends, tips, and other cool things that enable retailers to increase sales, serve customers better, and be more awesome overall. She's also the author of Retail Survival of the Fittest, a free eBook to help retailers future-proof their stores. Connect with her on LinkedIn, Twitter, or Google+.

Ten years ago, Bain & Company, working with Earl Sasser of Harvard Business School, analyzed the costs and revenues derived from serving customers over their entire purchasing life cycle, and we published the results in this magazine. (See "Zero Defections: Quality Comes to Services," Harvard Business Review, September-October 1990.) We showed that in industry after industry, the high cost of acquiring customers renders many customer relationships unprofitable during their early years. Only in later years, when the cost of serving loyal customers falls and the volume of their purchases rises, do relationships generate big returns. The bottom line: increasing customer retention rates by 5% increases profits by 25% to 95%. Those numbers startled many executives, and the article set off a rush to craft retention strategies, many of which continue to pay large dividends.

When we applied the same methodology to analyzing customer life-cycle economics in several e-commerce sectors—including books, apparel, groceries, and consumer electronics—we found classic loyalty economics at work. In fact, the general pattern—early losses, followed by rising profits—is actually exaggerated on the Internet. (See the exhibit "Customer Life-Cycle Economics in E-Commerce.") At the beginning of a relationship, the outlays needed to acquire a customer are often considerably higher in e-commerce than in traditional retail channels. In apparel e-tailing, for example, new customers cost 20% to 40% more for pure-play Internet companies than for traditional retailers with both physical and on-line stores. That means that the losses in the early stages of relationships are larger.

In future years, though, profit growth accelerates at an even faster rate. In apparel e-tailing, repeat customers spend more than twice as much in months 24-30 of their relationships than they do in the first six months. And since it is relatively easy for Web stores to extend their range of products, they can sell more and more kinds of goods to loyal customers, broadening as well as deepening relationships over time. The evidence indicates, in fact, that Web customers tend to consolidate their purchases with one primary supplier, to the extent that purchasing from the supplier's site becomes part of their daily routine. This phenomenon is particularly apparent in the business-to-business sector. For example, W.W. Grainger, the largest industrial supply company in the United States, discovered that longtime customers, whose volume of purchases through Grainger's traditional branches had stabilized, increased their purchases substantially when they began using Grainger's Web site. Sales to these customers increased at triple the rate of similar customers who used only the physical outlets. [For more on Grainger, see "How Grainger Helps Customers Make Sense of Complexity" below.]

In addition to purchasing more, loyal customers also frequently refer new customers to a supplier, providing another rich source of profits. Referrals are lucrative in traditional commerce as well but, again, the Internet amplifies the effect, since word of mouse spreads even faster than word of mouth. On-line customers can, for example, use e-mail to broadcast a recommendation for a favorite Web site to dozens of friends and family members. Many e-tailers are now automating the referral process, letting customers send recommendations to acquaintances while still at the e-tailers' sites. Because referred customers cost so little to acquire, they begin to generate profits much earlier in their life cycles.

In other words, when venturing into customer retention, you may have to wait for your investment to fully mature before you see a return. That wait is bound to be worth it, though, as the study also showed that boosting retention rates by just 5 percent can actually raise profits by 25 percent to 95 percent. Additionally, more data by Bain & Company indicate that a 10 percent rise in customer retention yields a 30 percent increase in the value of the company.

In a weak market, leaving consumer perception up to chance is risky. Only when you are actively engaged in marketing your business can you help it attract more customers, increase profits and ultimately, succeed.

Knowing how your clients feel about your products and services gives you the insight to implement necessary improvements, which is essential to customer retention. Fostering relationships with your customers maximizes profits by creating opportunities for renewals, referrals, cross selling and upselling. Customer survey data also helps companies establish solid benchmarks pertaining to pricing, production, and other critical aspects of their business processes and performance.

Finding the right company to assist with the implementation of a customer survey program is crucial to ensuring its ability to provide business leaders and management with data they can rely upon and use to increase profits and customer loyalty. Quality customer surveys can be streamlined into your everyday practices to enhance customer service and increase profitability. NBRI employs expert consultants armed with the tools and experience to help you manage your business better through science.

One of the most effective ways of using pricing analytics is segmenting different customer profiles into different price brackets or tiers based on their buying behavior or preferences. For example, if a certain segment of customers tends to buy more frequently than another segment, then it makes sense to offer them higher discounts or bonus points when they make purchases in order to encourage loyalty from them. Similarly, if certain segments of customers tend not to buy too much, then it might be wise to lower prices for those customers in order to entice them into making more purchases. By segmenting prices according to customer behavior or preferences, you can ensure that each customer feels valued while maximizing profits at the same time.

Combining customer research results with analytics using customer order behavior transaction data is a powerful and effective way for companies to gain deeper insights into their customers and optimize their pricing strategies. By leveraging the power of big data, companies can analyze customer behavior patterns in great detail and uncover valuable insights into customer preferences, values, and motivations that would otherwise be difficult

By implementing proper pricing analytics, businesses can ensure that customers remain loyal while maximizing profits. Through simulations of product level elasticity, cross elasticity, and the market basket effect, companies gain insights into how prices can be adjusted to create optimal price points. Furthermore, leveraging loyalty data helps identify opportunities to further customize pricing strategies and boost customer loyalty in order to retain customers over time. By taking advantage of these strategies, businesses can gain a competitive edge in their respective industries and achieve greater success.

The restaurant industry is highly competitive and customers have no lack of choices when it comes to choosing a restaurant for dining out or ordering in. Moreover, with the novel COVID-19 hitting the restaurant industry, it has become more important than ever for the operators worldwide to adopt strategies that enable help in increasing the overall sales and attract more customers to their business. This article covers some smart marketing strategies that would help you attract customers and increase restaurant sales.

Try and use this valuable data to recommend them to new dishes. Such actions will make them feel needed and valued. You can also give them a few offers. Restaurants create more sales through their regulars as compared to new customers. Hence retention of customers becomes essential. Your regular customers will also market you through word of mouth and by bringing in friends and family, which will help you to increase your restaurant sales. Getting your customers to come back will forever be your most significant achievement!

No matter how great business your restaurant is doing, chances are you would still like to increase your restaurant sales. One of the easiest ways to do this is through restaurant upselling. Upselling means convincing customers to upgrade their current purchase or buy more items. Restaurant upselling is the most common strategy for restaurants to boost their profits.

For you to successfully upsell your menu items, your staff must be very well trained. No upselling technique would work if the wait staff does not develop a rapport with the customers or is not in sync with all the menu items. In addition to this, you can also give free samples of the new things that you have incorporated into your menu to increase restaurant sales. Such activity will make the customers notice these dishes and increase their chances of ordering extra. Know more about various restaurant upselling techniques here.

Many people nowadays prefer to order food home, rather than going out and indulging in a sumptuous meal. Offering online food delivery would help you increase your audience base and enable you to reach out to potential customers.

You can organize comedy nights, karaoke nights, a guest performance, and can host various exciting events that will compel your customers to visit your restaurant on that particular day. Merely hosting will not be enough; you will have to market the game well so that the news of the event reaches maximum people. Hosting events will not just bring in your regulars, but also expose you to many potential customers who will not only increase your restaurant sales for the night but in the long run as well. 041b061a72


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