The greatest compliment a customer can give your business is repeat business. You want them coming back again and again to your store or website. The clients that continue to comeback for more of your services or products are called “loyal” customers. A loyal customer is one of the greatest things for your business for these three reasons.
- They are less expensive. According to Lee Resource Inc, it costs a business 5 times more to acquire a new customer than it does to retain existing customers.
- They bring in more profit. Based on Bain & Company study, improving your customer retention rate by 5% can increase your company’s profitability by 75%.
- They will drive growth. Gartner Group research shows that 80% of future business revenues are generated from 20% of existing customers.
So hopefully you understand now how important loyal customers are. So the question to answer now is, how do you do it? The following are 4 high impact strategies for establishing a loyal customer base and driving repeat sales:
- Get to know your customers – Invest in technology systems that allow you to collect demographic information about where they live?, who they shop for?, what they like and don’t like?, what they read?, how to reach them? as well as buying pattern information like what they buy?, how often they buy it?, and how much they pay? With this type of information, a business owner can easily run and analyze reports to determine how best to re-engage customers. Many entrepreneurs invest in point of sale (POS) systems and
customer relationship management (CRM) technology that can help them easily collect this customer data during the appointment booking and check-out process. For example, Salesforce, a CRM system, enables entrepreneurs to record the contact information and transaction history of their customers. Similarly, POS systems like Paypal, Square, PocketSuite, and others can track and store detailed data about customers, including their preferences (based on user settings), previous purchase information, contact information, product/service reviews, etc..
- Keep in contact – The best way to remind customers about your products and services is to communicate with them regularly. Many business owners maintain blogs and e-newsletters to share updates, offer special deals, and showcase their offerings. These are all effective customer retention tools. However, be careful in how and how often you share information and updates with your customers! You don’t want to overwhelm them by contacting them too frequently or sending them too much information. Because if you do, they will start to treat your messages as spam and downgrade you to junk mail. There are many great customer communication solutions like MailChimp and Constant Contact that make it very easy for entrepreneurs to stay in regular touch with their customers.
- Give them incentives – If loyal customers are truly more valuable than new customers, then roll out the “red carpet” for them. Make them feel special either by recognizing them, providing them discounts, and/or giving them exclusive offers. Yelp, an online consumer review site, has a special program to cultivate loyal customers called “Yelp Elite”. It is almost like a secret society Yelp customers who frequently post, high-quality reviews on their site. The Yelp Elite get invited to great parties, get special badges on their Yelp profiles, and they get all sorts of free food, drinks, and services from retailers and restaurants on Yelp. Pretty cool, huh!?! Most customers would love that kind of treatment. Taking the time to think through and offer an incentive program for loyal customers could help dramatically improve your customer retention.
- Repeat purchasing should be a breeze – It should be very simple for your customers to buy and rebuy products and services from your business. If you sell a service, encourage them to book their next appointment when they are checking out so you lock in their next purchase while you still have their attention. If you sell products, provide them with an option to leave their credit card on file so you can send them refills regularly. And/or throw in a free home or office delivery service for purchases over a certain amount so they don’t have to worry about the logistics of getting to and from your business location. The core principle is very straightforward. The easier you make it for customers to complete a business transaction with you, the more often they will!
Getting customers is important but keeping them is even more important. So invest in systems that allow you to develop targeted email campaigns. And take the time to design incentive programs that will delight your existing customers. And then make it really, really easy for them to keep buying from you.