Customer Base

The customer base refers to a company's set of customers who constantly buy goods and services from the company. They are primarily obtained or generated from the company's target market and are essential for a company to survive and make revenue. 

They are regular loyal customers. The main reason for the customer to keep buying from the same brand is due to the quality, diversity, affordable prices, etc. Hence along with building a customer base, retention through maintaining customer satisfaction is also essential.

• The customer base definition portrays it as the collection of customers of a company who regularly purchase goods and services from them. 
• It can be broad or tall. In the case of comprehensive, the number of customers will be significant, but each customer's purchase will be small. 
• The tall category represents a small number of customers contributing to a large portion of revenue, and the company shares strong customer relationships.
• Common types are loyal customers, recurring revenue, and all customers.

A customer base is a group of loyal customers engaged with a brand for longer. They buy products or services regularly and contribute value to the business. 

It indicates the proportion of customers with similar interests who are more than likely inclined to a particular product or service. If satisfied with the products or services, the regular customers act as free advertisers by spreading word of mouth and promoting the products or services of the brand/business. The appropriate customer base for a business can be identified using market research, experience within the business, or by looking at the customer base of businesses that offer comparable goods or services.

A customer base can be broad or tall. The broad category is composed of many customers making small purchases. On the other hand, the tall category represents a small number of customers with strong relationships with the company. The common types of customer base are as follows: 

• Loyal Customers: These customers have been purchasing the company's products or services regularly for at least one year. The most significant percentage of the customer base comprises the most devoted customers. The significant contributor to the total annual turnover generation of the business is also the regular loyal customers. The company, therefore, continues to serve these customers and keep them loyal so that they never have a reason to switch to a competitor's product.
• Recurring Revenue: Recurring revenue is similar to loyal customers since they engage in active usage by obtaining memberships, subscriptions, or paid access. If a company makes money by selling memberships or paid access, its subscribers are its customer base, like in the case of Netflix. Subscribers is another name for these customers. Most of the business's revenue comes from recurring customer revenue, which depends on the subscribers' active use of the business's services.
• All Customers: "All customers" is another category of the customer base. All customers who have made at least one purchase in the previous year are included in this customer base category. These customers may have once tried the product out of curiosity or in response to a promotional offer from a business. All brands should strive to turn everyday consumers into regular customers and advocates who will spread the word about the company's core and help increase their customer base.

The company's sales and marketing teams work together to widen the customer base. Some of the measures taken to increase it are the following:

• The company can enrich the customer experience by providing additional services, increasing the number of regular customers and revenue.
• A platform where a business can connect with everyone is social media. One of the simplest ways to expand the business is through social media. It can be done without spending much money on promoting the product. Instead, create a social media handle for the company and share information about it, including new content and details about the release of new products.
• A customer success program is one tool that can help with customer retention. Teams responsible for customer success keep an eye on obstacles a customer faces while accessing the goods or services. If they foresee any lag, they can get in touch with the customer and assist them in resolving the problem before it becomes a significant issue. When a business can eliminate pain points before customers even become aware of them, it can significantly prevent customer churn.
• Face-to-face marketing is a direct method of reaching potential customers. This approach requires businesses to converse with customers, perhaps even enquiring about their well-being and interests.
• A customer loyalty program is another valuable tool for retaining and gaining new customers. The program indicates a competitive edge when customers contrast the business with a competitor in the same industry. It can also keep the most loyal and dedicated customers interested in the brand's promotional offers.
• Valuing customer feedback is essential. The brands can either create a survey and publish it on their website or social media platforms or conduct face-to-face interviews with loyal customers to get feedback. There are many advantages of listening to your customers. For example, learning what the customers want helps businesses to develop or improvise goods and services to meet those needs. Moreover, appreciating the customers' feedback encourage loyalty. 

Let us look at some examples to understand the concept better:

• The customer base of OTT platforms like Amazon prime and Netflix is easy to comprehend. It is because they follow a subscription-based model, and the number of subscribers constitutes their customer base.
• Another simple example is associated with ABC, the confectionary company selling candies and chocolates. They have customers from all age groups and other segments. In other words, they have a large number of customers making purchases in small amounts. Hence falls into the broad category.

This article has been a guide to Customer Base and its meaning. Here, we explain its types, examples, and how to increase it. You may also find some useful articles here -

• Customer Retention
• Customer Lifetime Value
• Business Failure