Without your customers, you would not have a business. The key to developing an effective marketing plan is knowing who your most profitable customers are, how you can retain and keep these customers loyal and how you can attract new customers with the same or similar profile.

Retaining Your Key Customers
Many small businesses fall into the trap of focusing all of their marketing and sales efforts on trying to attract new customers, spending little or no time on trying to retain their existing customer base. However any successful big business will tell you that retaining your key customers is more cost-effective than trying to attract new ones. It is therefore essential that you start to set objectives and develop marketing strategies and marketing tactics that focus on the retention of your most valuable customers.

When developing marketing tactics to retain your customers you should consider:

• What is your unique point of difference?
• How can you differentiate your product or service from your competitors?
• What do your most profitable customers value about your product or service?
• What might entice your most profitable customers to move to a competitor?
• Which loyalty building tactics are needed to protect your most profitable customers?

Some examples of marketing tactics to retain customers include customer service programs, loyalty programs, customer research, newsletters and value added promotions.

Attracting New Customers
Once you are aware of which customer’s have a need or want for your product or service you can start putting in place marketing tactics that will assist in building awareness of your business and attracting new customers to purchase.

When developing marketing tactics to attract new customers you should consider:

• What is your unique point of difference?
• How can you differentiate your product or service from your competitors?
• Is your market expanding or contracting? Will you need to attract customers from your competitors or will they be new to the market?
• Which target market(s) do you most want to attract (i.e. what target market group will generate the most profit for your business)
• What are the most cost effective tactics to attract new customers to your business?

Some examples of marketing tactics to attract customers include direct mail, trial offers, sampling, local advertising, website advertising, price discounts and a public relations campaign.

Expanding Your Existing Customers
Once you have started to establish a positive relationship with your existing customers you can then look at ways in which you can increase the amount of money they spend with you each time they purchase. There are two ways that you can expand upon existing customer relationships- either through up sell (buying more of the same product or service) or cross-sell (buying other products or services in your range).

When developing marketing tactics to expand on your existing customers you should consider:

• What percentage of your customers needs do you currently fulfill?
• What additional revenue would be generated if you simply sold an additional product or service to an existing customer group?
• Which target group represents the greatest opportunity for up sell?
• What are your expansion tactics for each of your target markets?

Some examples of marketing tactics to expand customers include multiple buy discounts, gift with more than purchase, point of sale material advertising your range and website content.

By examining your current customers, seeing where you can add value and selecting the right marketing tactics will assist your small business in the market especially when market conditions become tougher.