To gain traction and market share, small and medium enterprises need to focus their efforts on winning customer confidence, because in a difficult economic environment, your customer base is your business’s most valuable asset.
South African customers are up against a barrage of challenges.
Among the greatest of the challenges is the financial pressure caused by the rising cost of living and the high unemployment rate.
In this tough economic climate, small businesses are faced with high levels of competition and increasing price sensitivity.
To gain traction and market share, small and medium enterprises (SMEs) need to focus their efforts on winning customer confidence, because in a difficult economic environment, your customer base is your business’s most valuable asset.
Friedrich Meisenholl, the regional investment manager at specialist SME financier firm Business Partners Limited, shared three tips business owners can follow.
“Business owners are constantly chasing leads, finding ways to convert those leads and grow their customer base. But while these performance metrics are important, it’s equally vital – if not more so – to focus on engaging your current customers, building trust, inspiring loyalty and generating repeat business,” Meisenholl said.
“The fact that acquiring a new customer can cost up to five times more than retaining an existing on, has become a mantra in the world of business; and for good reason. This is especially true during times of economic hardship, when customers turn to the brands they have trusted and believe in to deliver consistent value at the right price.”
His three tips business owners can follow:
According to the 2023 South African Customer Experience Report compiled by Rogerwilco and partners, reliability is the most important factor that influences consumers to make repeat purchases (68%).
Similarly, in terms of what contributes to repeat sales, the factor that showed the greatest increase in 2023 (54%) when compared to the previous year (50%), was brands always having what their customers need.
“In times of economic turbulence, people gravitate towards stability. In the business arena, this means that maintaining a steadfast commitment to delivering quality products and services on time, every time, should be a top priority.
“To demonstrate their reliability, small businesses also need to focus on getting the basics right. This means conducting quality checks and control measures, honouring delivery times and deadlines, being fully contactable during business hours and promptly addressing customer concerns and queries. None of this is necessary ‘rocket science’, but most people would be surprised to learn how many brands tend to neglect these essentials in times of adversity,” he said.
As difficult as it may be to acknowledge and rectify a failure, addressing customer pain points is one of the most effective ways of winning trust and loyalty.
A recent study conducted by Salesforce found that 88% of South Africans would be willing to forgive a company’s error after receiving excellent service.
Likewise, as much as 82% of consumers report that having their issues resolved proactively is the single most important factor in building trust with a brand.
“Your shortcomings as a business will provide you with the most insightful cues on how you can improve. For this reason, you should solicit feedback – through surveys, reviews, ratings and verbal interactions. Listening and responding to feedback won’t only give you the insights you need to learn and improve, it will also give you the opportunity to show your customers that you value their input and are willing to change and adapt to meet their needs,” Meisenholl added.
Big data has given brands the tools to understand their target audience in ways and with a level of detail previously unimagined.
“Ironically, the more connected the world becomes, through the advent of social media and digitalisation, the more disconnected people tend to feel,” Meisenholl said. “Fortunately, for SMEs, small wins in this regard can make a big difference. Something as simple as addressing customers by their names in email communication can be a big plus.
“You could also consider sending your customers tailored recommendations based on their buying or browsing behaviour, providing personalised thank you notes after purchases, sending birthday greetings and special offers, or adding a customisation option to certain products. Your customers are looking for authentic, human connection and personalisation is how to achieve that.”
BUSINESS REPORT