Losing customers costs businesses billions of dollars per year. But many small businesses are so focused on bringing in new customers that they forget about the ones they already have.
Sharon and Mark Spero, the owners of a Money Mailer franchise near Chicago, work directly with local businesses to both target new customers and keep the existing ones loyal. After 20 years in business, the Speros aren’t just direct mail experts – they’ve also seen firsthand how important customer retention is for building a thriving small business. They shared their best tips for how small businesses can improve their customer retention.
1. Sell to old customers, not just new ones.
When planning out your marketing strategies, from direct advertising to search engine optimization, it’s natural to think about how to attract new customers. But put some of that effort into your old customers too.
“Old and current customers know us well,” the Speros explain. “Current customers will often work with us on larger projects than new customers that are just testing us out for the first time.”
Creating a sales and marketing funnel specifically for existing customers is not only key to growing your business, it’s often a better investment of your time and resources. It generally costs five times as much to acquire a new customer as it does to retain an existing customer, according to Forrester Research. If you spend more of your marketing dollars on old and current customers, you will see more return on a smaller investment.
2. Understand their expectations.
Customer retention depends on customer satisfaction. But many times that satisfaction depends less on the goods or services you provide than it does on expectations.
“One of the most common mistakes [small business owners make] is to avoid hav[ing] the conversation with the client regarding [the client’s] expectations,” the Speros pointed out. “These expectations can often be unrealistic, unmeasured, and don’t match what they actually are trying to communicate.”
3. Offer to improve.
If for any reason a customer isn’t satisfied with their purchase or experience, the best thing you can do to retain their loyalty is to take responsibility and offer to improve. No matter where the mistake or miscommunication occurred, customers expect you to make the situation right – and doing so enthusiastically can turn even a disastrous situation into a loyal customer.
In fact, offering to improve, and making your customers a part of that process, can increase loyalty even in satisfied customers.
4. Communicate and connect.
Regular, personal communication is key to creating the feeling of personal connection that convinces customers to stay loyal to a small business.
By communicating with customers, you encourage their engagement, which in turn makes them feel invested in your business, the Speros explain.
“Through communication, a relationship is created, which often leads to a more loyal, long-lasting partnership.”
Keep your communication with your customers strong and personal. Wow them with great service and ultimately enhance customer experience by using responsive chatbots and other tools. It all starts by consolidating your existing communication channels into one and ensuring a better response time, a better resolution and a happier customer.