Do you understand the importance of cultivating a loyal customer base?
Whether you’re a one-man-band café owner or run a global giant, retaining existing customers is much more desirable for your business than having to create new ones.
In fact, it costs five times as much to gain a new customer as it does to retain an existing one. Here’s why: in an already saturated consumer market, customers are understandably spoiled for options.
They’ll need a lot more convincing to decide on a business that they don’t recognise as their destination of choice.
Major Advantages to Having a Loyal Customer Base
Customers who have already bought from your business require less marketing and sales spin because they’ve already enjoyed their experience with you. Trusting you and your brand will make them far more likely to want to return, rather than try somewhere new.
But even though returning customers cost you less than new ones, you still need to work at ensuring they come back time and time again. Here are some tried-and-tested ways of creating a loyal customer base.
Reward Loyalty from Repeat Customers
Loyal customers are the lifeblood of any successful business. Without them, your business will have to rely solely on new ones—which, as we know, costs a lot more money and takes a lot more effort.
In other words, loyal customers are key to ensuring your business thrives. Not only are they more likely to spend more money than new customers are but they also act as ambassadors for your business.
They do so by spreading the word and recommending your establishment to friends. So how do you ensure that your customers are loyal to your brand?
Appreciate Your Customers
The best way to achieve customer loyalty is to give your clients a solid reason to come back. This reason needs to be more than just the basics of good food and drinks. You need to make your customers feel appreciated.
Appreciating your customers doesn’t have to be overly complex. Doing so can be as a simple as offering them a free coffee or slice of cake. Some of the biggest names in hospitality do exactly that.
For example, in 2016 sandwich chain Pret a Manger gave away 1.7 million free coffees to customers who they thought were in need of cheering up. This clever marketing tactic caused customers to associate being happy with the Pret brand, making them come back again and again.
Don’t worry—you won’t need to hand out millions of free coffees to reap the rewards of a well-placed freebie.
Hand out as many as you feel is reasonable in proportion to the size of your business. If you only initially gain one or two repeat customers, they will still prove to be a worthy investment.
Give Customers Incentive to Return
A second way to grow customer loyalty is to give patrons an incentive to come back. A customer loyalty scheme is a perfect way to provide this incentive. For example, a simple stamp card that gives people a free coffee after they purchase a certain number will suffice.
Although this is a cheap and easy system to implement, it does have its downsides. It can be difficult to know how many loyalty cards you have given out, which makes monitoring their effectiveness slightly trickier.
Luckily, we’re in 2018 where there’s a technological solution for everything. Simply forget paper cards and move your loyalty program to an app!
Doing so will allow you to easily track the number of people who are using your reward program. You’ll also be able to learn the exact amount of revenue you’re gaining from your program.
Keep in Touch with Repeat Customers
Keeping in touch with repeat customers might be slightly more time-consuming than implementing a loyalty scheme. But doing so has the potential to really boost your number of returning customers.
A study found that customers who are highly engaged with a brand are 90% more likely to buy from that brand more frequently. They’re also 60% more likely to spend more than customers who are not as engaged.
Simply put, if customers regularly hear from your brand, they’ll choose you over the competition every time.
Talk to People Face to Face
There are plenty of ways to create customer goodwill and improve your brand. The easiest method is to spend time talking to your customers.
Talking to your customers turns the mundane process of buying a coffee into an experience. A study by the Harvard Business Review found that businesses that offered stellar customer experiences raked in 2.4 times more revenue per customer than those that offered so-so service. It’s safe to say that customers respond to good customer service and human interaction.
Talk to People on Social Media and Through Email
These conversations do not have to end once your clients go out the door. Another great aspect of the digital world we now live in is social media.
Creating a Twitter, Facebook and Instagram page for your café will give customers the opportunity to engage with your business on their own time. They can learn about you in a way that might not be possible in a short chat over the register.
Twitter is great for impromptu conversations with customers. Instagram is great for bringing your coffee shop’s brand to life and giving your fans insights into your vision for your business.
Email marketing, if you do it correctly, is another good way to encourage customers to come back. If you have poor email marketing, you’re not likely to see any return on your investment. There’s a chance you’ll actively drive existing customers away.
If you’re clever, however, about your strategy and create something that people on your mailing list actively look forward to, you’ll be right on the money. In fact, marketing specialists at WebpageFX report that every $1 spent on email marketing generates $44 in return.
Getting started on your first campaign isn’t difficult either. Simply sign up with an email service and begin collecting your mailing list.
Something to remember when carrying out your social media and email campaigns is that bombarding your customers with social media posts and emails can be counterproductive.
Simply post once a week, and you will avoid the risk of exasperating your customers and driving away the very people you’re hoping to court.
Working on getting those customers back through your door can be hard, but if you’re smart about it, you will definitely see a return on your investment.
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- How to Ensure Your Hospitality Business Has a Loyal Customer Base - November 13, 2018