Why Keeping Customers is the Best Small Business Strategy and How To Do It
Many small business owners believe the only way to measure success is by measuring profit. While turning a profit is of course a major driving force of every business strategy, there is another way to measure success: customer retention. Customer retention is vital to every business no matter the size and should be a key component in every business strategy.
Some small business owners are too focused on finding new prospects that will buy their products or services and end up neglecting their regular customers. While finding new customers is important, more time should be spent on retaining customers you already have. Below I review why dedicating your time, money, and energy to your existing customers is worth your effort, and give you actionable tips to build customer retention into your business strategy.
1. Marketing to existing customers is less expensive
Business strategy to use:
Offer a customer loyalty program, whether it’s a punch-card that gets them a free item or awarding long-time customers with their very own plaque à la The Flying Saucer – the bar mounts personalized plates for each milestone an enrolled customer reaches (100 beers, etc.).
2. Word-of-mouth marketing is free
Every entrepreneur must regard their existing customers as their most valuable assets because they can become effective in-person and online marketers. If you have a stable list of clients who are always ready to support you no matter how tough the market could be, then, rest assured when the time comes when you need to sell your business, you can always put value to your existing clients in terms of potentials earnings they might bring.
Business strategy to use:
Reward customers that refer their friends to you. For instance, DropBox offers extra storage space to those that refer their friends. Also be sure to encourage your customers to review your services on online review sites like Yelp; Lake Travis Zipline Adventures asks all their customers to review their experience on Yelp, and they have over 100 Yelp reviews. It’s amazing how simply asking your customers to share their experience can be an excellent marketing tool.
3. Resolving problems is a lot easier
Since you have already created a deeper connection based on trust with your regular customers, coming to terms when resolving conflicts or problems is much easier. Whenever a miscommunication or fault happens during a transaction, the chance for a quick resolution is almost guaranteed.
Business strategy to use:
Use a customer relationship management tool (CRM) to keep track of your customer interactions. You can also use your social media pages as a way to discover and address customer complaints. Though be careful with this – you don’t want to turn your Facebook page into a complaints board. If you don’t have another way for customers to air their grievances (like a message board or contact form), have a message saying, “Have a complaint? For the fastest response, send us a private message!”
4. Existing customers have great suggestions to improve your business
As you build a trusting relationship with your existing customer, the exchange of views, ideas and information is more likely to happen and become the means of your product or service improvement.
Business strategy to use:
Spend time evaluating complaints, suggestions, and comments from valued clients, then eventually come up with concrete actions to improve your business operations, like speedy delivery, a 24/7 online support system, or friendlier customer service.
Building a stronger relationship with your existing customers should be a major part of your small business strategy. Remember, maximizing your efforts with your loyal clients will result in amazing returns, whether it’s higher sales or tremendous growth. Give value to every existing customer you have at the moment and for sure he/she will return that favor with 100% support.
Jennifer Beardsley also contributed to this article.
