Using repeat customers to expand your reach

06Feb08

There’s a wonderful sushi restaurant near me that I like to visit on Sunday nights. Although they’re pretty busy during the rest of the weekend, Sunday evenings are always dead, especially during the winter months. I always found this surprising, since the food and atmosphere are great, and the prices are quite reasonable. The restaurant really ought to help people like me spread the word, since literally thousands of potential customers live in the buildings nearby. But how can they make this happen?

The approach I have in mind is quite basic. Figure out when the place is really empty, and create a promotion surrounding that period of time. Then, ask repeat customers to tell others about the offer, and reward them for doing so. Obviously, I’m not talking about asking people to hand out flyers door-to-door. Instead, customers would just be using an asset they have — namely, their residential building or workplace — to post a notice about the offer.

In my case, the plan would work as follows. After identifying me as a repeat customer, the sushi place would ask me if I’d like to get some free meals by helping refer other customers. If I said yes, they would give me a couple of flyers to place on the bulletin board at home or at work. These would advertise a big discount for eating there on Sunday nights and say that I’m the one recommending the restaurant (using my name to establish credibility). To redeem the offer, people would tear off one of the coupons and present it at the restaurant. There would be some sort of referral code on each one so they can credit me with bringing that person in. After perhaps 10 customers show up, I would earn a free meal.

Yes, this is very low-tech. Yes, there are lots of ways to automate it over the web. But that’s not the point. I’m just trying to show that people who really like a local business might be the best way to reach others with similar interests. And in dense urban areas like Chicago, New York, and San Francisco, getting those customers to put up just a single flyer in their apartment building or office could bring in considerably more traffic than mailing out coupons or buying local ads. And by rewarding those loyal customers, it helps strengthen their bond with the business and drives additional word-of-mouth recommendations.



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