What costs more – recruiting new customers, or keeping the ones you already have? According to Karl Stalk and Bill Stewart, co-founders of the Chicago-based strategic advisory firm Avondale, “It’s Cheaper to Keep ‘Em.” These business growth experts contend that as a business expands, it “gets increasingly harder to acquire more customers”, and in turn, the actual cost of new customer acquisition rises while the quality of those customers tends to sink. Research by Bain & Company reveals that in the financial services sector, simply increasing customer retention rates by a mere 5% led to an impressive 25% rise in profits! Ready to learn the best customer retention tips for your business? Let’s go:
Focus on Customer Service, Not Price
Depending on your specific industry, you might have trouble competing with the ‘big guys’ on price, but you certainly can shine when it comes to delivering stand-out customer service. Of course, being the friendliest, most customer-centric provider in town doesn’t mean you can charge sky-high prices and expect to remain in business; it simply means that your current customers aren’t likely to chase a lower price if they’re really happy with your customer service.
Create A Customer Loyalty Program
Virtually all major retailers, service providers and financial institutions today offer customer loyalty programs for one simple reason – programs that reward customer loyalty can be effective sales drivers. When Starbucks introduced their “My Rewards” program in 2013, the java giant enjoyed a “26% rise in profit and an 11% jump in total revenue.” While a high-tech customer loyalty program likely isn’t realistic for your local franchise business, you can reward your long-term customers by offering simple incentives that acknowledge your appreciation of their patronage. Consider running repeat-client promotions like discounts, value-added offers and free services for customers who are committed to your enterprise.
Be A Great Communicator
Have you ever tried to call a large corporation, only to wind up stuck in a frustrating, complex and decidedly off-putting customer service phone system? Focus on improving your communication with customers to increase your customer retention rates. Despite the prevalence of electronic messaging, customers still appreciate being able to connect with a real, live person when they call up a business, so be sure to make great communication a priority in your company. Need more help with your customer retention strategy? Drop us a line – we’re here to help.