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Five-minute money masterclass: how to grow your customer base

Written by Adam Pescod on Wednesday, 31 July 2013. Posted in Finance

Before a burgeoning business can start thinking about generating a healthy profit, it needs to convince a sufficient number of people that it has product or service is worth forking out for

Five-minute money masterclass: how to grow your customer base

Of course, an entrepreneur who has unbridled belief and passion in their project will probably be better placed to attract the new business that he or she needs in the early stages of their venture. However, desire will only get somebody so far, and there are other skills and activities that must be engaged if one is to grow their customer base at the desired rate from the outset.

 Engage with existing customers

Given that the everyday start-up won’t have budgeted for an extensive marketing campaign, word of mouth is undoubtedly its best friend in the early days. And in an age where the internet is king, offering existing customers the opportunity to rate your product or service is nigh on indispensable. “If you are a small business, and you are able to display recommendations and good reviews from previous customers on your website, that will certainly drum up business,” comments Jasper Martens, head of marketing and communications for online business insurance provider Simply Business. “It works for a business of any size, but especially for smaller businesses simply because it doesn’t cost a lot of money. It is basically one of the most cost-efficient ways to promote your business, and lets your customers tell the story, not yourself.” Fiona Hotston-Moore, tax and business advisory partner at accountancy firm Reeves, adds: “I suppose there is also an element of being brave enough to ask your customers to make referrals for you, which is obvious, but on the other hand it often gets overlooked.”

 Only network when necessary

The old idiom ‘time is money’ really does hold a fair degree of credence when it comes to business. For that reason, the opportunity to attend a networking event must be looked upon in terms of its potential outcomes, both positive and negative. “Networking is about quality rather than quantity,” comments Hotston-Moore. “It is about choosing the right networking events to go to, coming out of those events with one or two contacts to follow-up and following those contacts up consistently.” And, as Martens suggests, doing some thorough research beforehand should ensure you don’t end up wasting otherwise valuable time. “There are too many network events and if you are not careful, you will get carried away – you will end up at network events that don’t contribute to your business at all,” he says. “I would advise browsing a couple of network events you like so you can really engage with some people online. That way, you can identify some potential prospects and get some decent business cards.”

 Ignore the high street at your peril

It is commercial suicide for any aspiring entrepreneur to discount the internet nowadays. Nevertheless, the high street still has much to offer – which the world wide web doesn’t – when it comes to building one’s customer base. “You can’t ignore any market and still only about 10% of transactions in the UK are done online, compared to the high street, even though we are told every day it is dying on its backside,” says Stuart Conroy, owner and managing director of mobile phone and hand-held device accessories supplier Activ8 Distribution. “One of the problems with the internet is that, because it is so accessible, your business ideas can be copied quite quickly, whereas if you’re in the high street, you may get less business, but there is less chance of being copied in certain areas.” Conroy nevertheless admits that getting the price right is essential if you are going to make a successful go of the high street. He adds: “If the pricing on the high street is way above online, people will go home every time and just log on to Amazon and eBay, but we are seeing great success from some of our customers on the high street.”

 Smell what sells

This phrase may be familiar to regular viewers of The Apprentice, but it rings true for any budding business tycoon who has a product they believe will wow the masses. Needless to say, without undertaking a solid chunk of market research prior to launch, the ship could sink before it has even had the chance to set sail. “I think many entrepreneurs often get carried away by their business idea, they think it is amazing and brilliant,” says Martens. “They take a lot of risks – quit their job and set up their own business – but haven’t done any proper market research, and if you haven’t done any market research, you will fail.” He explains that market research needn’t be an expensive process either, citing the Office of National Statistics and Business & IP Centre at the British Library as readily available and cost-free resources for entrepreneurs.

 Be patient

At the end of the day, a sizeable customer base isn’t going to materialise overnight, so a little bit of faith – and trial and error – can go a long way. “You tend to rush things at the start but we have learned that it is better to go out and research the trade shows and our positioning in them,” explains Conroy. “We thought we had to show ourselves as big, brash and bold, but you actually don’t – you just have to be more selective, depending on your business model.” That patience extends to the initial contact you have with potential customers too, according to Hotston-Moore. “Winning new business is about developing relationships longer term,” she says. “You are unlikely to succeed in selling something to a customer on the first conversation or even the second conversation.” In that sense, the entrepreneur has to trust that eventually their professional perseverance will pay off.  

About the Author

Adam Pescod

Adam Pescod

EB's former editor, Pescod was tasked with ensuring these hallowed pages are rich with excellent, engaging and error-free stories, all written with the entrepreneur in mind. Pescod previously plied his trade penning pieces about pubs and pints. He is also a sucker for alliteration. 

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