Understand your customer base and your market

Understand your customer base and your market

Encouraging existing customers to buy from you more often is a quicker, easier and cheaper way to increase sales than attracting new customers. A good customer retention strategy is based on how well you understand your customers, your competitors, and the market you are selling in.

Understand your customers
Your sales data will tell you a lot about your existing customers, for example:

how often your customers buy from you
the type of products or services they buy
the cost of the average transaction
the average value of their order
Read more about managing your customer database.

You must comply with data protection law – see General Data Protection Regulation (GDPR).

Understand your competitors
It is important to understand your competitors. If you know who your competitors are, and what they are offering, you can:

set your prices competitively
improve your products and services
respond to rival marketing campaigns with your own initiatives
You can also use market research and market reports to help you understand the marketplace you are operating in.

Tailor your offering
Technology can help automate some of these processes. For example, you can set up different mailshots or emails to go to different customer segments. E-commerce software can allow you to offer discounts to particular customer groups, or send selected customers ‘e-coupons’ to use in your online store.

See email marketing.