FORTUNE Small Business:

How to bring more customers to your store

Targeted local marketing and customer retention are key to growing your sales.

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(FORTUNE Small Business) -- Dear FSB: I opened a fashion store in a high-income snowbird area last February. The store has high overhead and a high lease. With all the bad signs for the economy, stock market and real estate market, our market was hurting even before we settled here. With a limited budget, what would be the best marketing strategy to attract more customers?

- Tony Gim, Naples, Fla.

Dear Tony: You have to know your place in that Florida high society - and not as a humble member of the merchant class.

You'll need to be proactive in marketing, and that's not always a matter of how much money you can spend.

"A small independent store has to have a niche, has to be known for something, because you simply can't compete with the bigger stores in things like pricing and advertising," says Bob Ferraraccio, former director of retail sales for Hershey, who now counsels business owners through the Service Corps of Retired Executives in Ft. Myers, Fla.

"Define your niche. It could be something like an exclusive line of shoes, a special line of jewelry, or a designer label that's hard to get," he says.

Another tip: You must have a good customer database today, no matter what you sell, says Doug Fleener, president of the Dynamic Experiences Group, a Lexington, Mass., retail consulting firm and co-author of the blog Retail Contrarian.

"If you don't get your customers' contact information, you'll have to talk to the entire community to talk to them again," he says. "It's always more effective to market to the person you know."

E-newsletters are the most cost-effective way to do it.

"When I talk to retailers, they say that a lot of customers don't want to give out their e-mail addresses," says Fleener. That's because the retailers aren't telling prospects about the value the newsletter will provide, he says. It has to be more than simply sending out specials via e-mail.

"Share what's hot, give fashion tips, things like that, and you'll find people will be very happy to share their information with you," he says.

In your upscale neighborhood, there's enough charity events and social activities for you to be able to pick and choose what to be involved with, says Ferraraccio. Ask your customers which nonprofits they support, suggests Fleeney. Then, get involved in events like silent auctions or donating to those organizations.

"I've seen retailers do a nice job hosting an event on a Sunday night with a speaker, but then they deem the event unsuccessful if there aren't a lot of sales that night," says Fleener.

Instead of thinking about driving revenue from that event, think about it as capturing new customers.

"It ties back to the database," he says. "Maybe a person doesn't make a purchase on that first visit, but spends $1,200 a year in the store. You can afford to spend money to capture their information. Think 'how do I create customers?,' not 'How do I create sales?' Sales will follow the customer."

The consultants also suggest creating non-competitive alliances with other businesses where your customers spend their money, like high-end restaurants or health clubs.

"Work on trading customers," says Fleener. "That way it spreads out the cost of marketing," Ferraraccio adds.

Targeting the homeowners' associations and the small publications that circulate in the exclusive enclaves where your customers live could be another inexpensive way to reach them.

"You're definitely already in the right zip code, but you can target your customers even farther by getting per-capita income information from the library or the SBA," says Ferraraccio. "Then look for the little publications that specifically talk to your customer."

Don't forget to maximize the customers you already have, says Harry J. Friedman, president of the Friedman Group, an international retail consulting and training firm based in Culver City, Calif.

"One of the big flaws in marketing plans is focusing solely on bringing in more people. But what good is it to bring in more people if you're not going to sell them?" he says.

He suggests talking to your salespeople and finding out what percent of customers who enter the store make a purchase. Work to increase that number.

"Hold people accountable for their productivity and be sure to provide ongoing coaching," he says.  To top of page

How do you boost your retail sales? Share tips in our forum.

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