The answer is “yes” and “no”. CRM has certainly opened the door to influencing customer behavior with targeted offers and a better understanding of your customer’s preferences. And these are your customers, so by definition they are a part of your trade area. So, the answer is “yes”, your trading area is definitely impacted by CRM.
But, wait…. what about all of those people that you have no CRM data for? The ones that live across the street in that apartment complex or that work in that office building down the road? The reality is, if you don’t have a connection of some type with them…. a prospective lead, an email exchange, mobile app data…then there really isn’t much of a relationship to manage. Yet potential customers that live across the street and work down the road are definitely in your trading area. So, the answer is “no”, your trading area is impacted by much more than CRM data.
CRM data is an incredibly powerful tool for building repeat business and it can definitely drive growth. But, local businesses need to also look at potential customers and building Local Customer Engagement to drive growth as well. Even the biggest marketers around, those that spend hundreds of millions on marketing, mobile apps and yes, CRM, only have a market share of less than 20%. At HubKonnect, we are still really interested in the remaining 80% of your potential customers—this is where real sales growth can come from.
HubKonnect starts by defining your trading area and analyzing it. Those existing customers…the regulars…where are they before they visit your location? 1 mile away, 3 miles away, 25 miles away? The answers will vary depending upon your business and your location. The trading area for a downtown urban location will probably be much smaller than the trading area for a small town rural location. A multi-unit business, with multiple locations within the same city, will define each location’s trade area so as not to cannibalize from each other’s potential customer base. And if your business deals with “unique” offerings, you will be more of a destination and that will automatically enlarge your trading area. It’s essential to define the trading area radius that best suits your specific business situation.
Yes, explore it. Look at everything that’s in your trading area. These are your traffic generators: Schools, churches, businesses, college campuses, shopping malls, offices, factories, residential neighborhoods, apartment complexes, highways, beaches…. everywhere that you might find potential customers. Think about the number of people that you see in each of these locations every day and ask yourself if they are potential users of your product or service. Some traffic generators might be too small to consider, but we’re pretty sure you will find a few that will make you sit up and say “I’m going for the other 80%”.
Analyze what your biggest opportunities are. What types of customers do you find at each of these traffic generators? What are their ages and their ethnicities? Are there barriers to them becoming your customers, such as competition? What are the leisure activities that residents and workers enjoy? Festivals, parades, sports venues? Understanding what the biggest opportunities and potential challenges are, will help you pinpoint a strong strategic approach to expanding your customer base.
Develop a Local Store Marketing plan that’s targeted at reaching these potential new customers. Your plan should leverage all of the strengths that you already have going for you, and yes, that does include your CRM data. CRM is powerful and it can help you gain insights into your existing customers (and also into the behavior of potential new customers). Just don’t get “lulled” into thinking that CRM is everything…you have to build a relationship with your customers before you can manage it.
Focus on the opportunities you have discovered within your trading area. Create connections with new customers and you’ll see exponential growth and increased Local Customer Engagement.