On average, it costs six times as much to gain a new customer as it does to retain an existing one. Local builders’ merchants in particular prioritise building customer loyalty above all else, given the huge value of repeat trade customers.


However, there will always be a natural churn of customers as some move away or go out of business. Merchants should therefore continuously aim to secure new custom. This task can seem difficult if there’s little left in the budget to carry out marketing activities or other initiatives designed to find more customers. Here some tips from the Trader team on how to build your customer base on a budget.

#1 Referrals

When a new customer walks into your store without any knowledge of your products or customer service, you have to win them over before securing a sale, let alone their loyalty. If a current trade customer recommends your company to others, they’ve done most of the hard work for you. The referred customer will enter the store knowing that your store is a great place to buy from – it’ll take some effort on your part to put them off buying something! Some businesses find that offering discounts for referrals is a good way to reward customer loyalty, while others find that impromptu discounts and free gifts are more effective (and cheaper) than standardised referral promotions.

#2 Focus on your strengths

Marketing works best if you keep always goals and objectives in mind. Don’t take a scattergun approach, be focused – in terms of platform, branding, campaign themes and so on. Above all, focus on your strengths as a business. What do you do better than your competitors? Why should new customers try you out over their usual merchant? Once you’ve answered these questions, use them to define your new approach to marketing.

#3 Target specific groups

Similarly, think about the types of customers you want to reach out to. Do your strengths lie in serving trade customers, or do you think there’s more revenue potential in gaining new DIY customers? Split your target markets into groups based on demographics and psychographics (lifestyle, values, and personality factors) and figure out how to cater your marketing campaigns to each of them. If your budget is limited, only market to the group that you think is likely to be easiest to win over.

#4 Partnerships

Local builders’ merchants can benefit from forming partnerships with other SMEs and charities. Approach businesses who have a similar customer base to yours (but who aren’t direct competitors). Consider companies such as security businesses, clothing retailers and cafes. A partnership should benefit both businesses. Charities are almost always happy to work with local businesses, and charity partnerships give you a great reputation boost whilst helping you to display your company values and strengthen your branding.

#5 Social media

Revisit our merchants’ guide to social media. Social media accounts may be free, but the staff time it takes to maintain them is not. However, don’t discount their value entirely. If your budget is very small, choose a single social network to use and stick with it. Update it when you have the time, but try to post once a week at least. Quick photos of new stock coming in or even just the unseasonal weather outside are all that’s needed to keep your account active and in the minds of followers. Google your own business every month or so to ensure your online presence leaves a good impression on potential customers.

Once you’ve secured new custom, your marketing efforts shouldn’t end there. Use retail management software to follow how customer spend changes over time and explore email marketing to target specific groups of customers and increase revenue efficiently. Find out more about email marketing and how it works in Trader, or get in touch with your account manager for further information.