Customer Retention: The Key To Long-Term Business Growth
As a business ownerfor the last few years, I’ve always found it much easier to sell products and services to existing customers than to new ones. If you’ve done it once, why can’t you do it one more time?
Unfortunately, many people tend to forget about their old customers and only focus on acquiring new ones. Not only does that require you to spend more money on customer acquisition, but your business tends to stay at a standstill.
Every successful business can tell you the importance of keeping your old customers as you acquire new customers. For example, if you can retain your old customers and acquire new customers, you are gaining +2. If you totally forget about your old customers and only focus on the new ones, you are gaining +1.
While it may not seem like a big difference at first, 50% growth in customers has a huge impact in the long run. Through my experiences as a customer and a business owner, I would like to share with you the most effective tips and strategies to retain customers.
Reward Your Customers
If you want your existing customers to come back, you really need to give them a reason to want to come back. One of the most effective customer retention practices is the reward system.
On the day that your customers purchase a product or service, you give them a discount or some sort of lucrative offer that they can use on their future visit. Whether it’s relevant to their purchase or not is completely up to you!
Here’s an example of what I am talking about. Recently I had a brunch aboard The Queen Mary ship. On the way out, they gave me a flyer that provided me a discount if I came to their Halloween event a few weeks later. Since the discount was substantial and I felt like it would be fun, I came back. However, if I did not receive the coupon, I probably would not have even known about the event.
Customers are driven by rewards, coupons, or other promotional items. If you want to save money on marketing costs, find a way to strategically bring your old customers back. Having a strong base of loyal base of customers goes a long way.
Resell All The Time
Many business gets questions, complaints, or feedback from their customers after a purchase has been made. One of the best ways to hook a customer in is by reselling your products/services at any opportunity that arises.
If you receive an email, phone call, or even have a customer come to your store, solve their problems or concerns first. Once you have done that, start using their previous purchase as a threshold to resell them.
For example, if you own a furniture store and your customer just bought a television set, you can attempt to resell them on accessories for the television. If you’re talking to them via email, here’s a simple structure you want to follow:
Thank them for making the purchase.
Address their issues here. Find solutions for it.
I am going to attach our new Fall Catalog that just got released. Seeing as you bought an amazing 50 inch television, I think you will find some great accessories or even a nice stand for it. Closing.
As you can see, the email is simply driven around their original issue or complaint. Once you have given them a solution and eased the situation down, you want to quickly sell them on another purchase. By attaching the Fall Catalog, you do not harm your cause in anyway. It never hurts to let people look at what you have to sell.
“Well done is better than well said,” is a very famous quote by Benjamin Franklin. While you can sell your existing customers on future purchases by handing out discounts or talking to them, there is nothing like customer satisfaction.
In order to retain your customers, you need to impress them the first time. Nobody ever comes back to the store that gave them a cheap product. You need to value your customers and give them the highest quality of products or services.
Not only that, but you need to satisfy your customers every demand (with reason). There’s nothing like putting a smile on your customers face the first time around. If you can make your customers happy with their purchase, you are that much closer to selling them on your products or services again.
For some reason, loyalty cards work beautifully. You give people a loyalty or stamp card and reward them for frequent visits. The more times they come to your store, the more freebies they earn.
For example, Pinkberry has a loyalty card that they stamp for each purchase of frozen yogurt. Once you get to a certain number of stamps, you get 1 free cup of frozen yogurt. While this doesn’t seem like an exceptional reward, customers are itching to get their cards filled with stamps.
Loyalty cards are very strategic because they require the business to pay very little to maintain ongoing business. If the loyalty cards work the way they should, customers should come back on their own. You don’t need to spend any money on advertising or bringing them back into your store.
If you can find a way to lure your customers in with a loyalty card, you should take advantage of it. It’s a cost-effective method to keep your old customers for less and helps you grow your business by letting you focus on the new customers.
Often times, business owners are too strict about their business policies. Instead of understanding the value that a customer brings, they refuse to give in to their customers. Often times, especially in retail, customers have issues and want refunds after specified deadlines.
Even if they may be a few days past the return policy, I would highly recommend accepting the refund to build a positive rapport with your customers. Sure you may lose some money on that purchase since you have to re-shelve the item and do damage control, but how much is their long term value?
A good customer is often times much more valuable than a bad return. Even though you may lose some money initially, your customers will applaud you for the superior service. The best way to create a loyal customer is by giving them what they want.
Sometimes you have to go above and beyond your limitations to please others. While it may not pay off at times, it can be a great investment at other times. The value of a return customer supersedes anything else. Be fair and understanding with your customers to promote future business.
Meeting the needs and demands of customers is a very hard art to master. Combine that with a variety of other factors, and creating a loyal base of customers can be a challenge. However, there is nothing like having a customer who knows you and comes to you without needing to be pushed.
Before a business can really grow over a long period of time, they need to create a loyal base of customers. Once you have a loyal base of customers that you do not need to spend tons of money on, you can use your efforts to acquire new customers.