As mentioned in previous post most businesses lose large percent of their customers on a regular basis. We identified several reasons why customers leave. In this post we want to give you tips on how to make sure you retain large portion of your existing customers.
Losing a customer can cost you lot more than you realize. Research shows that it costs multiple times over to get new customers than to hold onto existing ones. You have to spend money on marketing and advertising as well as offer them incentives to come to you again. Our advice to all business owners is this – DO WHATEVER YOU HAVE TO DO TO HOLD ON TO YOUR EXISTING CUSTOMERS.
Here are the steps that show how you can accomplish this:
- Know your Customer Turnover
Recognizing that you have a problem is a first step towards finding a solution. If your customer turnover is substantially high you may have a fundamental problem that may put the future of your business in jeopardy. You need to take drastic steps to reduce this customer turnover.
There are several ways you can find out the customer turnover. Many Point of Sale software systems provide you reports showing 30-day, 90-day customer list (list of customers who have not ordered from you in last 30 or 90 days). You can also look at total order count by customer to see how many are frequent customers and how many order only once or twice. Typically, you will find few customers who order quite frequently that tapers down with large number of customers who have ordered only once or twice. - Get Customer Feedback
Once you know your customer turnover rate; this is the next important step in solving the problem. As we mentioned previously there are number of reasons why your customers may be dumping you.
You can employ several techniques to uncover those reasons. I know several clients who make it a practice to randomly call few customers after they have ordered to find out how the product and service was. If you have a web site you can run a poll to get customer feedback. There are several free survey tools available on the web. Amongst them are Surveymonkey, Free Online Surveys and many others. If you have a physical location you can have a brief survey that customers can fill while they are waiting. - Engage with Customers on Social Media
These days customers are taking their feedback directly to the Web using sites such as Facebook, Twitter, Yelp and others. You should make sure you are engaging with them wherever they are.
Monitor these web sites for any negative or positive reviews. Answer their concerns. We have described how to do this in our previous post on Social Media. - Introduce New Products
Many of your regular customers will become bored after having tried the same products for a long time. It is human nature to seek change once in a while. That is why it is important to keep introducing new products periodically.
In addition to bringing new products you should also look into having special plans for special days throughout the year. How about a special menu for valentine day or having a customer appreciation day with special pricing on certain items. We are sure you can come up with your own list for your business. - Give Incentives to Frequent Customers
Once you have identified frequent customers in step 1; you should pamper them to make sure they feel valued. These are the customers who love your product and will keep coming back to you as long as they are appreciated.
One of the restaurant owners we know gives free side entries to its frequent customers periodically as a surprise. Can you imagine the smile on these customers’ face when they receive it!! In addition, you should always be asking for their feedback to find out if they have noticed any difference / deterioration in services they receive.
How about you? Do you have additional ideas on how to retain existing customers? Do let us know.
Image Courtesy: lleite
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@Mick Constantinou Thanks for your comments and additional input. Love your term self-disservice. Had not heard it before; but it’s so true. Getting rid of technology for and replacing them with real human being not only improves customer satisfaction; but also it gives you an opportunity to learn from customer interaction and possibly sell more. That’s why Netflix – a company known for its customer service – does not have an email help. You can call them on phone and get the service in an instant.
Great synopsis. Two other strategies could be:
It’s Show Time – Customers don’t want to hear about you, your day, how busy you are, or the crazy man that sits in the cubicle next to you. Don’t let your bad day come through in your interactions (i.e. phone, face-to-face, email). Every touch is an opportunity to enhance customer loyalty (and it is healthier for you too).
Self-Disservice – Don’t fall into the technology trap of, “customers like the convenience of talking care of their own problems.” Some people may like to manage finances and commerce online, but EVERYONE likes to be pampered and served. Don’t let technology get in the way of a good conversation.
This is a great blog. I’m glad I found it.