Wouldn’t it be great if money appeared out of nowhere? If you didn’t have to work so incredibly hard to try to attract new customers, on a non-stop, frantic quest for sales? It turns out that there is a way to do this, and it’s the art of customer retention. This is where, as Harvard Business School made famous in their 1978 study, if a business can nudge up customer retention rates by 5%, it can enjoy a 25-95% increase in profits.
Customer retention is one of the most critical business practices you should be honing—but how do you do it in an age of increasing competition, rising customer expectations, and decreasing human attention spans? It’s not easy to stay top-of-mind. You need to build an ongoing relationship with your customers, so that your brand comes to mind first, every time.
Here’s a few ways to do this today:
Thoughtful business owners know that loyalty is something that must be cultivated and earned; it’s not a naturally occurring substance. The most obvious way to cultivate loyalty is to build a loyalty program—there are many good reasons why you should have one and if you need further persuasion, look at the phenomenal success of Starbucks’ loyalty program or Pizza Hut’s new rewards program. As you build yours, make it frictionless—for example, allow customers to sign up and earn rewards with no fuss, perhaps just by swiping their credit card. Your program should be easy to use, fun, and designed to delight your customers on each visit.
Personally connect with customers
How personally connected are you with your customers? Do you have automated processes in place so that once a new customer makes a purchase—or signs up for your newsletter—they are sent an email that makes them feel connected to your community?
Once you’ve said hello, keep that connection in place. Use modern software tools to use your point of sale to create a customer list, so that you know something about every customer and can personalize their experience. Finally, stay in their orbit across digital platforms—turn up in their inboxes with digital receipts that double as marketing messages, make them laugh out loud or swoon over your latest products in a well-orchestrated social media presence, sponsor their kids local softball team. Show up.
Know why they’re leaving
And then there’s this. If you’re losing customers, you need to know the source of the churn. Be proactive in asking for feedback at various stages of your customer journey—whether it’s through surveys, polls, or the good old-fashioned art of talking to customers over the counter. Is there a competitor you need to know about? Is there a fatal flaw in your store’s organizational flow that is leaving a sour taste in people’s mouths? Learn to listen, and ask good questions.
Empower your managers
Which leads us to the final, and perhaps most important point of all—your great customer service. Brand loyalty hangs heavily on customer service. How do you make sure every encounter with your brand is positive, helpful, and customer-centered? Empower your managers. Make sure the people on your front lines are being supported, encouraged and honed to be positive role-models for the rest of the team. Check in with them and make sure they have the tools they need to do their jobs—whether that’s a state-of-the-art POS system to save time and super-charge loyalty, or simply a pat on the back.
These are all small, cost-effective practices—yet the results can be a major boost to your bottom line.
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