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What is a customer base? 9 strategies to build and grow it

A customer base is an audience that buys products or services from a business. Learn how businesses build customer bases to support stable growth.

Av Tara Ramroop, Staff Writer

Senast uppdaterad May 28, 2024

Growing your customer base is a hallmark of the early days, months, and years of a startup. But the work to grow your customer base doesn’t stop, even after multiple rounds of funding and establishing a foothold in the market. Startups know better than most that strong customer-driven companies foster growth through all stages of the business.

Startups are uniquely positioned to implement a customer-centric strategy for growth. We’ll discuss why in a bit, but first, let’s go over the basics to building a customer base.

What is a customer base?

A customer base is comprised of potential customers, new customers, loyal customers, low lifetime value customers, and former customers.

Your audience is comprised of the people who are customers, might become customers, or used to be customers. These types of customers have differing goals and needs that you have to meet. Consider the following customer base examples when building your growth strategy.

Potential customers

Even before a customer makes their first purchase, they’re part of your potential customer pool—businesses and consumers in your target market you’re trying to win over.

You’ll likely direct most of your marketing efforts toward these prospects since they have the greatest potential to expand your customer base. In order to spread brand awareness and get on potential customers’ radars, many companies use incentives like free trials and introductory discounts to pique prospective’s interest.

New customers

New customers may or may not interact with your company again. They may become one-off customers who make a purchase and then leave. Or, they may become loyal customers who buy again and again.

To turn new customers into loyal customers, use surveys and feedback to learn what brought them to your brand and what would keep them coming back. Connect with new customers through digital engagement with emails, newsletters, and social media. Remember: It’s important to not just nurture leads, but to nurture current customers and build customer trust.

Loyal and repeat customers

Loyal customers love your business and continue to purchase your products or services. They may not buy every product you offer, but they have an ongoing relationship with your brand.

With this group, focus on upsells and cross-sells, finding new or higher-tier products and services they need. They already trust your brand—what other problems can you solve? And don’t let customer service fall to the wayside while looking for opportunities to upsell. During the cross-selling or upselling process, show customers some appreciation. This simple gesture lets customers know they are valued and further strengthens their commitment to your brand.

Low lifetime value customers

Lifetime value is the total earnings your company receives from a customer. If a customer only purchases intermittently or subscribes to your lowest plan, they deliver a low lifetime value to your company.

While convincing them to make more purchases won’t increase your customer base, low lifetime value customers still have the potential to increase your revenue. In order to convince these customers to invest more in your company, identify why they aren’t making more purchases. Use customer satisfaction surveys to learn how to better appeal to them and adjust accordingly. For example, you might discover shortcomings in areas like self-service that you can improve by implementing a knowledge base software.

Former customers

Former customers have left your customer base, but the story doesn’t end there. Revisiting why they left can help you win them back. Changing your approach to the customer engagement metrics you’re measuring can cut down churn preemptively while resolving issues that pushed others away.

Once you’ve addressed the pain points that caused a customer to leave, you can follow up with them about the changes. Maintaining customer interactions, even after they’ve left, leaves the door propped open for their return.

Why is it important to grow your consumer base?

The most obvious reason a company should strive to grow their customer base is the potential for increased revenue. More customers mean more sales and more business-related benefits like:

  • Stability: When most of your sales come from a small number of customers, losing even one can have a huge negative impact. Diversification reduces that risk and leads to greater stability.
  • Economies of scale: Manufacturing is more affordable when you can do it in greater quantities. Reduce your operating costs and gain higher profit margins.
  • Competitive advantage: When operating costs decrease, you can sell at discounted prices, undercutting competitors and further increasing your customer base. Alternatively, you can leverage your authority in the market by negotiating better prices with your competitors.

How to build a customer base

Build your customer base by identifying your target market, analyzing your current customer base, analyzing your competitor’s clients, and crafting an ideal customer profile.

There are many ways to take a customer-centric approach to growth, but these are our top four ways to build your customer base.

1. Identify your target market

Your target market is the group of consumers who are most likely to buy your product or service. You need to understand who they are and what they need in order to appeal to them and earn their business.

Conduct market research with surveys, focus groups, and data analysis to learn demographic details and purchasing behavior. Look at your competition. Determine how those businesses cater to their customers and if there are any areas in the market currently being underserved.

2. Analyze your current customer base

Review customer information in your customer relationship management (CRM) software to spot trends. Then, create a segment of customers who frequently buy from your business. What characteristics do they share?

Along with using your CRM, survey your most loyal customers. What are their needs? What products or services most interest them? Analytics software makes sourcing these findings fast and makes it easy to spot trends. Compile your findings into one resource, like a document or spreadsheet.

3. Look at your competition’s client base

Use competitor analysis tools to identify your competition’s customer base and compare it to your own. Are there customers you aren’t reaching that your competition is? Would it be worth it for you to pursue those customers?

4. Craft a customer profile

Use the information you’ve gathered to build a buyer persona—a semi-fictional profile of your target customer. Creating a customer profile is a great tool when considering new products and marketing strategies. Profiles can be used as a point of reference to ensure any new initiatives will appeal to what these customers are looking for. And if you have multiple customer segments, create multiple ideal customers for certain products and services.

Build your customer base by personalizing service with the help of robust customer profiles.

Customer profiles can range from being broad to very precise. Common details include:

  • Demographics: age, gender, and income

  • Psychographics: personality traits, values, lifestyle

  • Behavior: buying patterns and spending habits

Free customer profile templates

Get to know your ideal customer base better with our free customer profile templates.

How to grow and retain your customer base

Tips for growing your customer base include personalizing interactions, developing a referral program, focusing on customer success, listening to your customer base, and expanding with current customers.

Bolster your customer base by increasing customer engagement. Use these strategies to deliver great experiences and keep more customers pouring in.

Personalize customer interactions

If a customer feels like your business is only interested in getting as much money as possible from them, you won’t gain their loyalty. They’ll likely jump ship as soon as a new opportunity comes along. But, if you treat them like a valued customer, they’re more likely to stay committed to your business.

One way to show that you care about them is through personalization. Use customer profiles to help customer service agents stay informed on who they’re interacting with. Notable details to pay attention to include:

  • Where the customer is located

  • Past issues they’ve reported

  • Purchase history

When done properly, your customers will have higher satisfaction levels and greater engagement with your company.

Develop a customer referral program

If you only see customers as a source of sales, you’re missing out on other ways they can aid your business. Customers can also act as an extension of your marketing efforts if you establish a referral program that rewards buyers when they bring in new business.

Determining the incentive is a good place to start. Depending on the nature of your business and what motivates your customers the most, you might consider these incentives:

  • Discount your service

  • Offer a free product

  • Upgrade the customer’s plan

Create a tracking system to issue rewards quickly and accurately as customers will lose interest if they don’t see the fruits of their labor.

Pay close attention to the referral program’s results and adjust your policy accordingly. You can try improving participation by offering discounts to the new customer and the person who made the referral. But be cautious: If the incentive is too generous, you might have to reduce it to avoid hurting your sales.

Make customer success a cornerstone of your strategy

You can have the best, most customer-centric product in the world, but without the right go-to-market (GTM) strategy, it’ll never gain traction. It’s also possible to have high sales, but if you have high customer turnover you’ll struggle to maintain growth.

Target customer success to cut down churn rates. If a customer is accomplishing their goals by doing business with you, they’re more likely to continue doing business with you. This can be accomplished by giving your agents specific initiatives to focus on in their interactions. Here are some good starting points:

  • Talk to customers every day

  • Use those interactions to nurture the relationship, not just get another sale

  • Make sure buyers have what they need to succeed with the product

Remember: It’s important to find the right customers rather than selling to anyone willing to sign up. While these numbers may be impressive in the short term, it can hurt key metrics like net retention rate (recurring revenue from customers over a set period of time). Net retention rate benefits from a great product, but it also requires tight execution after the deal is closed to ensure they keep coming back.

Listen to your consumer base

Listening to your consumer base, as well as customer conversations, can help your business understand customers’ perspectives, allowing you to better assess how your company can play a greater part in their business and life. Ideally, this will result in more business from these customers.

Use customer feedback to find out what else you can be doing to increase engagement with your base. Customer engagement can be achieved through in-depth conversations with “high-usage” customers who can explain the value they’re receiving from your company’s service or product, and what they need to get even more value out of it.

Expand with current customers

The cost of acquiring a new customer is much higher—up to five times more expensive, in fact—than the cost of customer retention. A business should maintain its current customers as well as look for ways to expand its base as it grows.

To do this, examine how customers are already using your product and look for ways to prolong their engagement. For example, if:

  • Customers use multiple services to fill gaps in offerings, increase your services to become their one-stop shop.
  • Customers make intermittent purchases, create a customer loyalty program to promote more frequent purchases.
  • Customers subscribe to your lowest plan but don’t upgrade, offer affordable custom plan options so they only pay for the tools they use.

Customer base examples

Customers differ across industries, so what one company targets isn’t necessarily right for another. Look to the examples below for ideas on how to build a customer base in your market.

SaaS customer base example

The bulk of SaaS customers are institutions. Depending on the service, a SaaS company might have one or more of the following customer bases:

  • Small businesses

  • Government agencies

  • Nonprofits

  • Health care providers

  • Educational institutions

Retail customer base example

Retailers can appeal to consumers at-large or have a specified target market. These types of business can target based on gender or age, including:

  • Men

  • Women

  • 18-24 years old

  • 25-34 years old

  • 35-44 years old

  • 45-54 years old

Or, retailers can target based on interests, like:

  • Outdoor enthusiasts

  • Athletes

  • Health-conscious individuals

Finance customer base example

Similar to retailers, financial institutions have a variety of customers, requiring a more tailored customer engagement platform experience. Finance companies might have the following customers:

  • Retail customers

  • Small business owners

  • Corporations

  • Institutional investors

What have some businesses done to grow customer bases?

These Zendesk customers have successfully built their customer bases by leveraging the tips shared in this guide. Learn how they did it and how you might replicate their results.

Shopify: Increasing upselling opportunities

Retail software provider Shopify saw explosive growth early on but struggled with supporting new merchants. Sales agents were inundated with questions regarding both sales and support, with customers bouncing between departments until they finally received an answer.

Shopify retooled its approach to customer support and let its sales team take on coaching roles. Now, the sales team can handle support questions and use those interactions for upselling and cross-selling. The company has an average customer satisfaction score (CSAT) of 92 percent while managing 170,000 conversations per month.

“We’re preoccupied with CSAT … and we want to make sure we’re doing the right thing with customers and with agents. We want to make sure the merchants feel helped and supported, and that we aren’t chasing costs at the detriment of the merchant experience.”Chris Wilson, Director of Technical Support at Shopify

Accor Plus: Streamlining customer experience (CX)

Accor is a leading hospitality network that offers luxury travel experiences through Accor Plus. Personalization and communication are key to delivering great service, so Accor is focused on building the best customer experience strategy possible.

The company achieved this by optimizing workflows that keep the customer in mind. Agents have access to detailed personal information in a centralized space, removing the need to navigate multiple screens; and Accor’s help center uses AI to address high-volume tickets.

These initiatives are paying off, as the brand saw a 20 percent increase in inbound revenue and a 352 percent improvement in response time.

“We are able to drive more reporting with Zendesk and show executive leadership that support is a revenue-generating center, in addition to improving customer satisfaction and member engagement.”Christopher Douglas, Director of Member Services at Accor Plus

The moral of the story: If you’re trying to learn how to build your customer base, you need to have tools and resources that help you engage with them. Start by partnering with a company like Zendesk that specializes in customer service software focused on the customer experience.

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