It pays to target promotions and other efforts on your most loyal customers.
By Monica Mihu
As a small business owner, maintaining customers loyal to you is a vital aspect that has an impact on your success and growth process. You seek to develop strategies and techniques to achieve customer loyalty. Because of the great competition on the market, customer retention is something for which small businesses fight for every day.
Although it may seem that new and already existing customers play the same role in the development of your business, things are a little different in the two cases. The costs of bringing new clients to your business exceed the costs of keeping the existing ones.
Businesses need to determine where their potential prospects are and to invest in high quality advertising to convert them into their customers.
On the other hand, the situation changes when looking at the case of already existing customers. The costs of maintaining a customer are lower and the benefits are great. For instance, the customers that you have can refer your business to other potential clients. Thus, they become the key to new clients.
Moreover, if we look at a few numbers, we can see that customer retention influences how a business develops. According to Gardner Group statistics, 20% of your already existing customers will bring you 80% of your future revenue. Also, with every 5% increase in customer retention, the profitability of your business can increase with 75%. These are only a few percentages that highlight the importance of customer retention.
Customer retention techniques
It can be observed that customer retention is essential to the growth of small businesses. Here are four lifelong techniques that can increase your customer retention rate.
- Create promotions
People are very attracted to special offers and this gives you a great reason to create them. Promotions can vary from sales on a particular category of products to a special price for a service package. To make it clearer, let’s take a look at the following example. You are a small restaurant who also offers home delivery. You can offer free home delivery for people who order after 10 p.m. This may result in them choosing your business for a late-night snack.
- Special offers for loyal customers
The term ‘loyal customer’ has a different meaning from one small business to another. It is up to you to decide who your loyal clients are. After you finish this step, think of how you would like to reward them for their loyalty. Let’s stick to the example with the small restaurant. You consider loyal customers the people who come and eat at your place at least eight times per month. You can send them a coupon in which you offer them a free dessert next time they eat at the restaurant. You can choose to send this coupon by email or SMS.
- Excellent client relations
People may face difficulties when working with you. Whether it is related to placing an order or the delayed arrival of a package, you need to be able to answer to all of their questions and guide them if they need to take a certain action. Creating a pleasant experience for them will help you build a great business image in their eyes.
- Stay in touch with your customers
Customers love when companies contact them to ask them about their experience when working with them, if they are satisfied with the services and products. It shows them that they are working with people, and not with businesses. Create a communication schedule in which you establish clearly when you contact them to ask for feedback and through which channel of communication.
Your already existing customers are very important to your business. It is crucial to develop customer retention strategies that will keep them loyal to your company and help you grow your small business.
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Monica Mihu is a copywriter at KingEditor, a content writing agency. She is interested in marketing and entrepreneurship, and loves reading and writing.
