Out of the Box

Acquiring New Customers the New Way

By Menachem Lubinsky on December 20 2010

It was just another store in one of the newer malls in Florida. The sign in the window already gave some indication of the store’s approach to winning over their customers. “Welcome New Customers,” the bright red poster read. Once inside, the sales staff was quickly all over each customer, “Is there anything I can help you with?” This was an offer that they kept repeating almost every 3-5 minutes as we were browsing. What was noteworthy was that it did not seem rehearsed, a fact not lost on customers.

After checking out at the register, the sales clerk handed us a $25 gift certificate that we were asked to fill out, but it was not to be used by us, but rather by a friend. The sales manager said that he estimated that at least 40-50 new customers a week come in with the certificate that was given to them by a friend. He also said that the average purchase was $250 and well worth the $25 discount.

Acquiring new customers for any business is a lifeline for its future growth and development. Marketers have long argued that the best way to attract new customers is via word of mouth. This essentially means that a customer who will have a good experience will no doubt pass this on to someone else and so it goes. The important point is to never let your guard down on offering good service, counsel the marketers.

But in today’s highly competitive business environment, marketers are constantly introducing new ways to attract new customers. They argue that customers have so many choices that word of mouth is just not good enough anymore. A Midwest fashion accessory company regularly sends “specials” to email lists he acquires. In the email he writes: “The attached offer for the antique bracelet is yours if you send this e-mail offer to ten friends with the following code. Should any of your friends order $100 or more, the attached bracelet is yours.”

Another Florida appliance store offers points for every recommendation of a potential customer. Each recommendation earns 5 points with special free merchandise if 100 points are reached. Many other retailers have adopted the “frequent buyer’s club,” earning members points and many prizes.

Marketers suggest that the best recommendations are those from satisfied customers. That is why many retailers often court these customers with regular communications, newsletters, special offers and favorite customer deals. One marketer calls them “the priceless customers.” It is why chains like Bloomingdale’s open some of their stores an hour early occasionally for the preferred shoppers and even assign special professional shoppers to attend to them.

To curry favor with customers, many retailers now empower their “associates” – new name for sales people – to engage their customers in what they call “a farewell conversation.” You may have experienced this on the phone or in person. “Have I satisfactorily answered all your questions?” “Have I been helpful to you?” “Is there anything else I can help you with?” A new era of friendly talk by salespeople in the hope that it sufficiently registers to make you a repeat customer and more importantly to make sure that you are an ambassador of goodwill to the next group of customers.

The marketers who have been pushing this approach the most also believe that it is important to introduce such a culture in a business. Every employee must fully buy into this way of thinking for the program to succeed. More and more companies include this brand of marketing in their in-staff training and offer rewards for successful integration of the new customer program into their jobs.

The appliance company has even introduced a version of this program in its repair division. Repairmen are routinely trained to promote new products at the location of the repairs. They offer customers specials on new wiring, automated timers for their appliances, “free” inspection of other appliances and so forth. The company says that this approach alone has generated more than $1 million in new business.

Some companies have adopted programs that laser in on attracting customers in specific neighborhoods or people in like circumstances. A letter might read: “We recently provided roofing services to a house on your block. You may have seen our grey striped trucks on your blocks. Call us for a free estimate on your roofing needs.” A supplier of fishing apparel is able to secure lists of people who have adopted fishing as a hobby.

A wedding photographer offers a newlywed couple that used his services a free beautifully framed portrait for recommending a friend that goes on to sign up the photographer for their wedding. He says that he gets 3-4 jobs a month that way.

Even companies that have structured marketing programs, including advertising, promotions and special events, are still urged to focus a part of their program to new customer acquisition. They may be even more successful because they invest into branding. Ironically, I often find companies that are fully involved in this activity, but don’t consider that part of marketing. It takes a bit of convincing, but in the end I am sure that they realize that not only is this an integral part of marketing, but it is probably one of the most important activities of the marketing mix. So where is your next customer coming from?

Out of the Box is a collection of strategic marketing articles that Lubicom has published on various topics, trends and ideas in the marketing world. The articles have been published in the Hamodia weekly newspaper circulated on three continents to a readership of well over 100,000.

The name, "Out of the Box" is a term used frequently in business nowadays to describe creative thinking that is not the norm. It is meant to help a business pull away from the pack or separate oneself from the competition. It is to some extent fraught with risk, simply because it is not the run of the mill thinking, but it is at the same time the key to reaching the next opportunity.