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The success formula for small business is "simple." Provide an excellent product or service that solves a problem, attract customers, compel them to return time after time (and bring some friends) and finally, achieve profitability. But building a strong customer base and maintaining their interest over time can be difficult.

It's no secret that it costs significantly less to sell to a current customer than it does to acquire a new one. This is one of the reasons why it's so important to nurture customer relationships and build a repeat business engine.

Today's online communication tools, like e-mail, make it easy and affordable for business owners to engage customers in a dialogue and keep them engaged long after they have left the business' store or Web site. E-mail marketing is a highly effective and low cost way to proactively communicate with customers and takes less time and resources than traditional marketing options such as direct mail.

While the results from campaigns like print advertising are often difficult to ascertain, e-mail marketing gives businesses insight into how their campaign matches the needs of their customers. Using the tools offered by established e-mail marketing service providers, businesses can easily determine how customers react to newsletters, i.e., if they open them, opt to unsubscribe or click on the links in the e-mail and more. This is invaluable information that can help improve future campaigns and make them more targeted and meaningful to customers.

Communicating successfully depends upon the strength of your customer relationships. The following steps will help you establish trust and drive customer loyalty.

Step One: Build a list of people that want to hear from you.

One of the most important aspects of building trust with customers is to ask for permission to send them your e-mail marketing communications. This will ensure that you are marketing to an audience that is interested in what you have to say.

To build your list, begin by requesting permission to collect e-mail addresses at every point of contact with your current and prospective customers - both online and offline. For example, you can add a "Join My E-mail List" sign-up box on your Web site, prominently display a sign-up book in your store or office, and ask people you meet if they would like to join your e-mail list. Establishing a connection with your prospects and customers is a critical step in building a relationship. Your customer list is a business asset that you can leverage over time.

Step Two: Make your readers want more.

Once you have made a connection and collected contact information, it's important to nurture your relationship by sending customers useful, relevant, and interesting information that address their concerns and needs. A successful e-mail marketing program does more than pitch products; it educates customers and sets the groundwork for building a strong relationship. By providing information relevant to your customer, you can become a valued resource to them. Being viewed as an expert is a key first step towards generating customer loyalty and ultimately, repeat business and referrals.

Step Three: Decide when you want to communicate and stick with it.

Planning ahead is a key element of a successful e-mail marketing campaign. However, since an e-mail schedule will be different for every business, it's a good idea to pay attention to subscriber feedback and open rates, especially in the beginning, to determine the best frequency for your customers. If you see that your customers are opening their e-mails in the evening, consider sending your next campaign at that time.

By following a regular schedule, your recipients will quickly learn when to expect your e-mails and will be more likely to read them. Consistent and scheduled communication can strengthen the relationship that you are trying to build.

By looking at your calendar, and paying attention to the feedback and reactions from your customers, you can map out what information you want to communicate and determine the best timing. Planning your content and focus ahead of time will make it much easier for you to develop your campaign and stay on schedule.

Step Four: Create a two-way dialogue.

Unlike other forms of marketing, e-mail also provides an affordable way to establish a two-way dialogue with your customer, the very foundation of relationship building. You can use e-mail, and in many cases online survey tools, to solicit feedback from your customers about their needs and current challenges and pains. This demonstrates to your customer your commitment to serving them for the long term, while helping you build a better product. This insight will also help you set long-range plans and make changes in how and what you communicate with your customers.

Eric Groves is senior vice president of sales and business development for Constant Contact.