Customer Retention: Build a Loyal Customer Base
You've worked hard to build a loyal customer base by attracting, educating and converting would-be patrons. Now how do you keep them?
Customer retention is something many businesses struggle with, but it's well worth your while to focus on it. According to research by Harvard Business School, increasing customer retention by just 5% can boost your profit by anywhere from 25% to a whopping 95%.
Here are three ways you can entice customers to come back to you again and again.
1. Add value.
How can you provide the best service at the most competitive price? Make sure to deliver an exceptional level of customer service without overpromising and under delivering. Extend that added value by educating your customer and providing them with options to improve their lives.
Be authentic in what you offer and set realistic expectations. If your printing business can turn around a job within three hours, don’t promise you can do it in one—and then disappoint your customers when they were counting on you. Rather, let them know you will provide a high-quality product to them in three hours at a fair price. If you complete it early, give them a call to let them know. You will surprise and delight them, which is enough to draw them back for more.
2. Make loyalty pay.
Hotel chains do it. Online clothing retailers do it. Even your credit card company does it. Loyalty programs are an obvious way for retailers to encourage repeat business. A recent study shows that Americans hold memberships in more than 3 billion customer loyalty programs.
To be successful, stand out and engage the customer in an unexpected way that goes beyond the overdone rewards points system for items your customers don’t want or need. You should design your program around exactly what they are looking for if you want it to entice them to continue to spend their hard-earned money with you.
If you run a bakery, you know your customers like baked goods. The predictable reward would be to give them a free muffin for every dozen they purchase. You can kick it up a notch, though, implementing a tiered rewards program (think platinum, gold and silver status). Or perhaps you can partner with the yoga studio down the road to run a cross-promotional program where frequent customers of your bakery can enjoy a discount on yoga classes, and vice versa.
They key is to be both creative and customer focused as you design your program. Click here for more unique ideas for loyalty programs.
3. Take your social media reviews seriously.
What do you do when you feel cheated by a mechanic, get your hair butchered at an expensive salon or have a run-in with rude wait staff at a restaurant? After you share your experiences with friends, you may take to social media—Twitter, Facebook or Yelp—to vent your frustration. Your customers may do the same thing when they’re upset with you.
According to a 2016 study, 74 percent of those surveyed felt positive customer reviews made them trust a business more. Though you can’t guarantee all your reviews will be glowing, how you respond to the negative ones tells your prospective customers about you, too.
For instance, if a customer wrote a negative review on social media complaining about how slow the service was at your business, you can reply directly to them—for all to see—apologizing for any inconvenience and offering to make up for it. Then supply your contact information so they can reach out to you directly to settle the matter to their satisfaction.
Of course, the best way to avoid being berated online—and to preserve your good name—is to take care of your customer before they walk out your front door. If you do, you may find that they take to social media to share their positive experience—a measure that may earn you new customers while salvaging a relationship with an existing one.
In the end, every effort you make to retain your existing customers is effort well spent. Take good care of them—and provide a few perks along the way—and they’re more likely to keep coming back, safeguarding your business for the future.