Many small businesses have a:
- Marketing plan
- Business plan
- Sales plan and
- Budget plan
But do you have a customer retention plan? Have you planned on increasing and maintaining customer loyalty?
You should be! Customer loyalty is the true source of your dependable, regular cashflow. In many businesses it essentially is your cashflow.
The cost of loyalty vs. new customers
Lets be frank here – being a great business and respecting clients with quality services and products is always the right move – but it’s really the dollars and cents that keep our businesses alive.
Do you know how much it costs you to gain a client? This is sometimes called cost per lead or cost per sale. It is extremely important.
If you don’t you should look at Google analytics and other data reporting tools to discover this figure.
Did you know? On average it costs around 5-7 time more money to gain a customer as opposed to keeping them?
Once you have factored all the marketing, sales efforts, time, wages etc. your cost to acquire a customer will be surprisingly large. The cost to keep one is vanishingly small.
So once you have won a customer – how do you keep them?
Meaningful rewards
Create a truly valuable rewards program to incentivise loyalty. Economics is all about incentives – it is the motivation for human decisions – so you’d better be dangling a carrot.
What this looks like depends on your business but the core idea remains the same – make sure it is a meaningful incentive to remain a customer, not a cheap gimmick. You could offer discounts for multiple sales, build promo codes into your e-store and spread them to your valued clients through a social or email campaign.
Perhaps you have a retail environment where a loyalty card system would integrate well with your Point Of Sale software – similar to a coffee card. Perhaps you send extra products as a bonus to returning customers, or free half hour consulting sessions as a Christmas gift. It’s up to you but make sure it is a meaningful incentive, not a cheap gimmick.
Consistent communication
An easy way to stave off issues is to keep communication lines open and respond quickly to fires. If you have a frustrated customer you have a small window to turn this around and keep them loyal and satisfied.
This means you have to on your game when it comes to accepting and fielding customer issues. Monitor your social daily for negative comments or complaints. Deal with them ASAP before you lose a customer or even more from the perceived negativity.
The best way to lose a loyal customer forever to a competitor is to ignore their emails, phone calls or social posts. Stop it before it builds.
Make it easy to like you
In fact, just make your customers life easy. This is not just about User Experience (UX) but also the various ways you can make your client’s interactions with you easy, quick, meaningful and frictionless. This is about providing value in a seamless way.
The aim is to integrate ease, value and a lack of friction at all points of your business. If its easy to do business with you, loyalty and repeat business follows Like what?
- Website: Ensure your website is clear, easily navigated and with the most essential information and calls to action front and centre – such as booking links, e-store links and essential proposition.
- Contact and booking: If you are a service business you need to make it a breeze to book you. Use modern booking software instead of relying on arduous personal contact methods like phone and email. Keep your method to the least amount of clicks and effort possible.
- Useful topical advice: Use your marketing channels, not to spam your clients but to provide meaningful and valuable assets or advice. If you area trainer – provide plans, templates, tips and inside information. Make it truly useful and of value and watch loyalty climb.
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