Every business works hard to get more customers. Year after year, retailers spend billions of dollars on advertising and marketing costs to put their brands out there and reel in new business. What’s funny though is that while most companies exert every effort to get more customers, not all of them invest enough resources to actually keep those customers they’ve worked so hard to acquire. Don’t make the same mistake.
Research by the Harvard Business School found that “increasing
customer retention rates by 5% increases profits by 25% to 95%.”
Moreover, retaining customers doesn’t just grow your revenue, it also costs less than acquisition. According tothe book Leading on the Edge of Chaos by Emmett C. Murphy and Mark A. Murphy, getting new customers on board can cost as much as 5 times more than keeping existing ones. With that said, if you haven’t been investing enough effort towards retention, below are some tips to help increase your customer retention rate and loyalty:
1. Get to know your customers
The first step to discovering how to best retain your customers is to get to know them. What are their favorite products? How did they find you? Who are your most loyal patrons? These are just some of the questions that you should aim to answer when gathering intel. The insights that you’ll gain from answering these questions will enable you to craft better offers or launch more effective campaigns that would boost loyalty and encourage repeat purchases.
Getting answers is fairly easy; you can do it simply by talking to the people who walk through your doors. Ask questions as you assist them or conduct small talk during the check-out process. Make those quick over-the-counter conversations count and take note of important insights. Also pay attention to your customer records and track their purchase history, as well as any location or demographic information that you have. If your POS software offers a customer management tool, use it your advantage.
2. Keep your employees happy
A US Chamber of Commerce report cited a Sears study linking employee satisfaction to customer retention. Research showed that “if employee satisfaction were to improve, there would be a corresponding improvement in customer satisfaction. The study also found that quarterly revenue would then grow by about 1.6%.” Be good to your employees. Lift their morale, and you’ll find that they’ll serve your customers better. This, in turn, will boost loyalty and generate repeat sales.
3. Make use of loyalty tools
Why not add gamification to the mix? Incentivize and reward your loyal customers for coming back. Depending on your business, you can create loyalty programs in the form of rewards cards, discount or VIP programs, events and more.
Not too keen on creating elaborate programs? Then try simple but thoughtful actions such as handwritten notes or phone calls instead. As the Small Business Administration put it, “in today’s digital world, these old-fashioned methods just might be the most memorable and effective customer loyalty tools of all.”
4. Provide unparalleled customer service
Even if you have a great product, you’d still be hard-pressed to find loyal patrons if your customer service is abysmal.
Whether you’re attending to your customers while they’re browsing through your store, assisting them over the phone, or responding to their comments via Facebook, strive to offer excellent customer service at all times.
Go above and beyond for your customers. Treat them exceptionally well and build relationships. By doing so, you’ll not only build trust and loyalty, but you’ll boost your world-of-mouth marketing too, as customers would be more than happy to share their great experiences with your company.
5. Offer valuable content
Provide free resources. Educate your customers using your blog, newsletters, or even your product packaging, if possible. Offer tips. Give them ideas on how to make the most of your products and services, or simply share stories that would entertain or inspire them.
Doing so enriches customer experience and gives them additional reasons to choose your business over your competitors. More importantly, offering free yet valuable stuff further cements your relationship with them, thus building familiarity, engagement, and loyalty in the process.