For Internet entrepreneurs and tech startups, the rule about customers is the same as it is for any other business: to get them is great, to keep them is success. Customer retention can come from a lot of different avenues, but when you do business exclusively online, customer incentive programs are an incredible way to make up for the lack of personal interaction owners have with patrons. Whether it’s gift cards during the holidays or a get-the-fifth-one-free card system, even modest incentive programs cost money, and in business, everything that costs money requires a budget.
Follow this guide to getting your customer incentive budget right.
It’s an old cliche in business that 80 percent of your profit comes from 20 percent of your customers. But some things become cliches for a reason. The 80/20 rule is so often true that startup owners should try to identify the golden 20 percent from the very beginning. If you ran a casino, these would be the high rollers who you should be scratching and clawing to keep. These are the repeat buyers who could become customers for life – if you put a stellar customer incentive program in place.
The right software is the key not only to finding your startup’s 20 percent, but it’s also going to be the tool you use to budget for your business’s customer incentive program once you do identify them. The good news is, for businesses – especially online businesses – that aren’t particularly complicated, the software doesn’t have to be expensive. In fact, it can be free. Even better, the top free software programs are cloud-based, meaning you don’t have to download any software or worry about storing sensitive data on your hard drive.
For more information, check out “Free Financial Software: How to Get It.”
The free, entry-level versions of web-based programs such as Mint and Outright are not comprehensive business programs designed to tackle inventory and invoicing. They are, however, powerful financial tools that can put your startup’s customer incentive budget into perspective. Both have slick interfaces and intuitive categorization tools that help you identify your best customers and set aside money specifically for incentivizing them to come back.
Budgeting for customer incentive programs is similar to budgeting for anything. Long-term discipline is required to set money aside quarter after quarter to ensure a steady stream of cash to keep the program going. The right software takes the guesswork out of it. But software can’t compel you to trim costs elsewhere to ensure funds are dedicated to the 20 percent of your customer base that keeps your business going.
Kimberley Laws is a regular contributor to HowDoYou.com and the author of two blogs, The Embiggens Project and Searching for Barry Weiss. A "Jill of all trades," she is a High School English Teacher and Certified Career Counselor with a background in makeup artistry, retail banking, and graphic design. She is also a scrapbooking, PEZ-collecting, car enthusiast who loves travelling and New York City.
Sep 25, 2013 1
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