Owning or even running a small business in today’s competitive market isn’t as easy as it used to be. Keeping a customer is a fraction of the cost of acquiring a new one, so it’s more important than ever to keep the customers you have. You’re probably thinking, ‘I would love to give more of an effort retaining my customers. But I don’t have the time or money for another marketing campaign, especially for customers I already have.’ That’s why we are here to help. We have found some ways to do this with little effort and on the cheap. This article from HelpScout.net has a great list of 15 strategies you can implement today that are proven to work.
According to the Harvard Business School, increasing customer retention rates by 5 percent increase profits by 25 percent to 95 percent. This is important to consider when evaluating your own customer loyalty strategies because in the customer service echo-chamber there is a lot of “hoo rah” about taking care of customers, but little discussion on the business side of things.”
It’s extremely important to look at the business end of retaining customers and creating customer loyalty, as long as you don’t get blinded by the data. The internet is great because you can track everything on an extremely granular level and gather insights about your customers you wouldn’t think possible. However, there can be a down side to this. Having too much anything can be dangerous if you don’t know how to use it. My suggestion is to break it into parts like: suggestion box entries, customer service emails, surveys, social media, etc. That way you don’t get information overload, make snap decisions, or worse, get analysis paralysis – where you don’t do anything because you’re too busy analyzing the data to implement anything.
One thing to remember: In the end, you are dealing with humans – real people with real feelings, not just statistics or percentages. People have emotions that drive their purchases. Therefore, if you make them feel good, reward or empower them, they will keep coming back for more. If you make them feel dumb, frustrated, or insecure, they are not likely to do business with you again. It doesn’t take much effort to reward your customers for being loyal, and the positive effect of saying thank you will far out way the expense to do it. Here is an article from GoLocoMarketing.com that outlines some great ways to create customer loyalty.
Maintaining a consistent customer loyalty base is one of the most important marketing tactics available to business owners, however many businesses overlook this vital customer loyalty strategy. It cost three times more to acquire a new customer compared to the cost of retaining one that you already have. Taking into consideration the life value of the customer, it makes perfect sense to focus on retaining the clients you already have, rather than consistently prospecting for new ones again and again through various marketing strategies.
The thing to note is that you have already spent marketing dollars on acquiring your existing customers; so all of the repeat sales from that database create a higher profit margin than it would for new clients because you do not need to spend another dime on marketing to them.
It is a myth that most of our customers “get stolen” by the competition. The truth is that only 9% of your customers leave because of competition; 14% leave because of unresolved complaints and dissatisfaction; some go out of business, some move away. All those reasons generally account for only 32% of all customers that leave you.
So what about the other 68%?”
In my eyes, the only way someone can steal a customer from you is if you aren’t meeting that customer’s needs. At that point, they were most likely on their way out anyway. Treat your customers like people instead of dollar signs, listen to their complaints and return with a solution (even if the solution isn’t perfect). This makes happy and loyal customers, and a happy customer isn’t going to jump-ship for a small price difference or service hiccup. Take aways: Treat your customers like people, be honest with them, and implement some sort of rewards program to give back to those who are helping make your business successful. In this article with Gary Vaynerchuk, he explains the benefits of keeping it real with customers.
The people who successfully engage with me are the ones that understand how to influence me on a personal level. They are the people who have taken the time to really know who I am, outside of the sale or our current business deal. They know my son’s name is Xander, that there are two girls in this world I’m absolutely crazy about named Lizzie and Misha, and that my favorite drink is root beer.”
I like this guy, he keeps it real and tells it like it is. Social media is huge these days and if you aren’t able to using it to engage your customers, you should really start now. If you aren’t the techiest person, there are ways to hire freelancers to do the work for you for on the cheap. (Check out our blog post: The $5 Marketing Team). If you are already using social media to connect with the public, make sure you aren’t just broadcasting, e.g. sending general messages. Instead truly engage your social media customers, fans, and friends by asking questions and trying to get them to respond to you. The more customers interact with your company, the more your business will stick in their minds, and when they are ready to make a purchase, you are far more likely to pop into their head.
Now you have some good ideas and strategies that can be implemented at your business to increase your customer retention and brand loyalty. So don’t just sit there, foster customer loyalty. Help someone become a happy customer, shake a hand, give a discount, or reward a customer just because! Trust me, the return on your effort, will be exponential. One last thing to remember, customers are people not numbers and need to be treated as you would want to be treated at the businesses you frequent. The golden rule applies to business, the same as everyday life.