The Happy Hour Concept
Have you ever wondered why bars have Happy Hours or restaurants have early bird specials? Why would anyone want to discount their food or drink offerings and make less money for a period of time? Is it out of the goodness of their hearts or perhaps as a community service?
Quite simply, it is a way to attract customers when business is typically slow or to entice new customers to try you out. What can we learn from this common practice for our business? While there are easier parallels with business to consumer types of retail enterprises, there are definitely applications to even pure Business to Business organizations.
The practice of making a product or service more attractive than usual is a tactic to attract customers that might otherwise go on with their normal routine. It can also make the barrier to trying something new less intimidating. By creating a reason for customers to come into your business when it is typically slower, you can leverage your day-to-day offerings as well as obtain new customers that can result in repeat business. In the case of being unfamiliar with you and your offering, it can lower the barriers to trying something new. This could take the form of â€˜new customer discountâ€™ or a percentage of your first order. However, this only gets people â€˜in the door.â€™ It is then up to us to provide value that they are willing to pay the full price for.
Understanding Customer Value
Every business should look at the value that an average customer brings to their business over the lifetime of that customer. This is known as the â€˜lifetime valueâ€™ of our customers. A person who comes in each weekday to buy a cup of espresso spends $5 per day, $25 per week, $100 per month, or $1200 per year. These numbers tend to get our attention more than a $5 cup of Joe. If a customerâ€™s lifetime value is $6,000, what are we willing to do to get them into our establishment regularly? What if that value is $60,000 or $600,000?
The â€˜happy hourâ€™ concept is a way to fill in less busy times and to get people to consider trialing your value proposition. Once you establish your value, they are willing to stay longer, buy more, and come back more often. A more recent variation of this technique is known as a â€˜rewards program.â€™ This is the practice of tracking a customerâ€™s business and rewarding them for more frequent or more valuable patronage. It started in the airline and lodging industries but has progressed to your local ice cream shop and hardware store. More sophisticated companies utilize complex customer relationship development and management technologies to further define and cater to a customerâ€™s unique buying patterns and individual tastes. The promise of a â€˜rewardâ€™ is the hook by which you begin to gather this information.
Business Challenges During Times of Uncertainty
If your business has survived the recent global pandemic, chances are you are in a position to grow. Many businesses that were barely making it before faced too difficult a mountain to climb and closed up shop. Those of us who survived, have evolved or continued to have something of value to offer. The current priority for most businesses is expansion or business development. How do we attract more customers? How to we provide more value to our existing customers? How do we keep our existing customers from going somewhere else?
In any difficult time, discretionary expenses such as marketing and promotion are easy targets for cost reduction or avoidance. However, in our current economic recovery, we must all consider how to expand our businesses, not merely continue to exist. Now is the time to launch new marketing and promotional strategies. Now is the time to begin to add new products that will be of interest to our existing customers. Now is the time to evaluate how our customers get to us and to strengthen or existing channels, but also evaluate adding additional channels.
Do your customers find you on the internet, map programs, social media or rating apps? Do you proactively manage your profile on these platforms? Once they find you, does your digital presence reflect your current messaging and is it relevant? Does your website, social media, and traditional media have a consistent look and feel? Is it easy to find what you are looking for or be motivated to take action once you encounter it? Does your website collect visitor data called â€˜cookies?â€™ Do your social media interactions direct people to your website with actionable promotion? Are you collecting potential customer data into a searchable format with â€˜affinity groupsâ€™ identified? This is the role of a Customer Relationship Management system.
Customer Relationship Management systems can be as simple as a list of phone numbers, emails or addresses that are collected during the sales or research phase. Most of our businesses have this information buried in a system somewhere, however, we do not evaluate it, hone it, or use it. If we do not collect this valuable information today, we need to start! We are not recommending the abuse of this information by creating SPAM. However, it is prudent to simply use this information to make potential and previous customers aware of your changing offerings, new products, or promotions.
Social Media Opportunites
As far as social media, do you encourage your â€˜satisfied customersâ€™ or raving fans to tell their friends? Do you encourage or initiate interactions post sale to gain insight into their experience? Do you promote product or project â€˜selfiesâ€™ or â€˜unboxingâ€™ with your customers? Do you seek influencers in your particular sphere of customers who would be willing to try your product and provide their honest feedback? Many influencers are willing to â€˜tryâ€™ your product and provide a shout out, provided it meets or exceeds expectations. Are you partnering with â€˜likeâ€™ and complimentary businesses who sell too similar or the same customer types? Are there industry or user group associations you might get involved with? Have you considered â€˜sponsorshipâ€™ where exposure of your brand could provide supporting or introductory touch-points?
Does your product need assembly or installation instructions or additional explanation of its differentiation in the cluttered marketplace? Have you considered setting up your own YouTube channel to organize, store and provide these bits of information that might help your customer choose your product or service over another? Do your suppliers have such a site that you could provide easy links to?
The bottom line is that promotion and discounts such as Happy Hours, discounts, social media shout outs, and more are the tools you need to expand your business. While traditional media advertising and exposure have their place, are you using all of the tools at your disposal to grow your business? Do you have a child, nephew, or other person who is engaged in these new media that can help direct your efforts? There are many â€˜expertsâ€™ out there, but a word of caution, choose wisely. Whatever you do, make sure you have proper measurements in place to quantify the impact of various tools, and determine the return on your investment. Bring Happy Hour to your business today.