Reportedly, the U.S. Small Business Administration and U.S. Chamber of Commerce found acquiring new customers costs from five to seven times that of keeping customers
Do you know what percentage of customers your business is losing each year, simply because you fail to pay attention to the customer relationship? What can you do to retain them, let alone grow the profitable sales you get from them?
Typically, the cost of serving loyal customers falls and profits rise. Combined with additional purchase volume, and profits should rise even further. But do yours? Do your costs of retaining customers and increasing their purchase volume cut too much into the additional profit you could gain?
Some things to consider:
First, consider whether the particular customer is even worth any extra effort or special privileges. Reportedly (Harvard study), roughly half of ‘loyal’ customers generate very little profit. How many of yours are profitable enough? Other studies show that the length of time being a customer does not necessarily correlate to increased profits.
Typically the loyal customers cost less because you no longer have to spend money to acquire them. And, it’s easier to sell to them because they are more familiar with what you offer and how to buy from you, so you spend less time in the sales process with them.
On the other hand, some expect more for their loyalty. Some will exploit any ‘easier’ return policy you might have for ‘loyal’ customers.
Any potential increased revenue from having a customer over a longer period of time does not directly relate to increased profits. With some customers, it can mean lower profits.
That being said, here are a collection of ideas from a number of articles and publications on increasing your customer loyalty and retaining customers that are worth considering.
- Personalize their experience of buying from you. Don’t treat them like just another dollar in the coffers.
- Discover and make note of their key traits useful for making their customer experience even better.
- If and when you can, be proactive and anticipate what they need or might need, and be prepared ahead of time to provide it to them.
- Check in with them often enough to show you care about how they are getting along.
- Invite them to events they might like to attend.
- Tailor your messages to them, as personal as possible, but at least accurately by the ‘category’ of customer they are in. In other words, don’t send one generalized marketing message to all your customers. Base the messages on their profiles, to make it most relevant to their concerns.
- As best you can, build your ‘trusted advisor’ relationship, so that they can come to depend on you for advice that truly helps them.
- Be courteous, willing and helpful. This matters more than speed-of-service. While you don’t need to spend time with them idly, don’t do things that could make them feel rushed or ignored.
- If you want loyal customers, you need them to care about you. The smallest of helpful gestures can contribute to loyalty. Perhaps subconsciously, the customers feel obligated to reciprocate by returning you the favor of buying from you again vs. buying from your competitor.
- Give service above and beyond what is expected. Surprise them with sooner-than-expected delivery or higher-than-expected results. This can also be stated as under-promise and over-deliver.
- Don’t be afraid to do something outrageous to satisfy a customer, and don’t be afraid to tell the story about what happened. Other customers may resonate with the story and remain loyal to you, learning about your willingness to satisfy.
- Make the positive proof that your product or service is accepted and used by others (testimonials) visible and well-known to your customers. This can reinforce a decision to stay with you.
- Be sure your purchase process is as easy and friendly as can be. Make sure it doesn’t become complicated or unfriendly over time. Customize it to their channel and method of buying, if you profitably can.
- Develop bundles that make decisions about purchases easier.
- Fold any extra little ‘fees’ into the total price, instead of listing them separately and putting them for debate.
- Consider creating a ‘gold class customer’ category to put your more profitable loyal customers into and informing they are part of this category, compared to others that only ‘silver class.’ Or, use a category label such as, “Awesome Customer.”
- Hand write a personalized Thank You note card delivered to them.
- Make a Customer Feedback system visible and easy-to-use. Don’t be afraid to collect feedback.