“People are more willing to buy branded goods provided they are persuaded that they are getting value from them. And they need to be convinced of those benefits, in authentic everyday language, without being confronted by corporate-speak. Get it right, and you create a virtuous circle. Get it wrong, and you get punished for it.” – Andrew Curry
What do you believe is the best way to improve and increase market and brand penetration? Is it by gaining new customers? This may seem like the most obvious answer and while it is not wrong, this must be supported by customer retention. The strength of a company’s customer base can be determined by the number of loyal and long-standing customers in it. Every company strives to increase market and brand penetration and keeping existing customers would help to meet this end. Brand penetration is not an easy task and irrespective of how well and much a company may try, they would not succeed if they kept losing customers. This would mean that people are not happy with the company / brand and hence attracting more customers would become a near impossible task. Without a strong loyal customer base, a company would not be able to use its brand to enter current and new markets in an attempt to gain market share.
The more customers a company is able to retain, the better will its chances be of increasing brand penetration and usage. This in turn would lead to increase in revenue, profitability and a huge potential to capture an even larger section of the market. The strategy is simple – retain and gain more customers than you lose – stay in the ‘game’ longer and more successfully. There are a number of reasons due to which customers may decide to choose one company over another or switch ‘loyalties’ from their current company to its closest competitor. It would behove the company to understand these reasons and implement strategies and tactics to ensure that not only do they retain their customers but are also able to convince the customers to serve as brand advocates to improve market and brand penetration.
With companies ‘mushrooming’ in every industry and sector, the risk of losing customers is a real danger and those companies that remain focused only on acquiring new customers could be causing a lot of harm to themselves. We know that the cost and effort of gaining new customers is at least twice as much as is required to retain existing customers and in addition it takes much longer for new customers to become profitable. Reports and research reveals that at least 48% customers stop doing business with a company because they were treated poorly and receive shoddy customer service. This is huge and no company can afford to lose customers at this rate. The loss of revenue from losing a customer is just one part of the negative effects. A severe dent in market and brand penetration also result from customer churn and could dramatically decline a company’s staying power in the market. In addition, a company would need to incur huge costs to replace the lost customers, which would slow its growth and profits – not a wise move in the current market scenario.
We understand that being able to retain all customers may not be possible (or feasible) but in order to improve market and brand penetration companies must implement strategies that would reduce customer churn. As mentioned, the most important reason that customers leave a company is poor customer service and therefore it is imperative that companies fix the most often recurring and biggest issues in the kind of service they provide. Product quality, range and pricing are factors too but since many companies offer almost the same products and price ranges, a company would be able to distinguish itself through the kind of customer service it provides.
When customers invest time and money in a company, they expect to be treated well – made to feel special and know that the company values their business. Many companies, in their attempt to increase market and brand penetration, make the fatal mistake of ignoring their existing customers, making them feel unimportant and not cared for. Even without statistics, this just sounds scary and so wrong – ignoring the lifeline of your company is possibly the worst manner of doing business. To improve and increase market and brand penetration, it is imperative for a company to create, build and sustain a culture and focus of customer-centricity. Not only does this kind of focus help to gain new customers but also keep existing customers happy and loyal. In fact, happy customers are the most potent and impactful way to increase market and brand penetration – they encourage others to do business and willingly use every channel at their disposal to spread a good word about the company. The kind of positive attention that this kind of ‘advertising’ could draw would far outweigh any other strategy to gain new customers and improve market and brand penetration.
In addition, to providing stellar customer service, a company could also focus on adjusting its prices. Many companies often lower their prices when trying to gain new customers and to improve market and brand penetration. This would be effective since potential customers would not know how good a product or brand is until they use it. In order to entice them to use, the ‘proverbial carrot’ would be attractive prices, discounts and incentives. Of course, prices must not be too low or too high but rather decided on post a thorough market survey to ascertain the prices of the nearest competitors. Too low or too high pricing could have an adverse effect – too low and customers could become suspicious of your company’s intentions and quality of the products. Too high might make them believe that your company is out to dupe them and cannot therefore be trusted. Both scenarios could seriously adversely affect market and brand penetration.
Well-thought out and articulate promotional campaigns could have a lasting positive impact to increase market and brand penetration. Customized campaigns and well-written content would make promotional activities even more effective and capture the minds of customers long enough to keep them loyal. Great content would be of no use if it were not distributed properly using popular and preferred channels. To increase awareness and market and brand penetration, proper and structured distribution of content and promotions is crucial. As mentioned, customers like being informed especially about new products, improvements in current products and services and also knowing that feedback they may have given is being incorporated by the company. Of course existing customers want to know what is new and best before anyone else does and companies that remember to keep their customers informed have a better chance of increasing market and brand penetration.
The other advantage of putting together strategies to increase market and brand penetration is that product usage would increase due to higher awareness. As customers come to use and like products and services, the chances of them sharing their experiences with others would be high. Even if they do not recommend the offerings, even a single positive comment via social media could rapidly increase brand awareness and make others curious to ‘try’ the product or service. Many companies use these satisfied customers to gain ‘entry’ into a particular customer segment – for instance they may offer a homemaker some household goods at a discounted rate and also promise more such products if they are able to gain more customers. Incentives such as these entice not only the target customer but encourage them to get people in their circle of friends and associates to use the product –thereby increasing market and brand penetration.
It is a well-known fact that getting non-users to begin using a new brand is possibly one of the hardest jobs for any company. It makes sense then to use existing resources to help spread awareness to increase market and brand penetration – the existing customer base is that vital and effective resource.