How Smaller Companies Can Improve Customer Retention
For a business to be successful, what does it need?
Employees? Well… yes. Business Owner? I guess so.
What a business really needs to be successful is; CUSTOMERS!!
It’s very hard to have a successful business if there isn’t anyone interested in the product or service. In fact, I have yet to find a business that has success with no customers and I don’t expect to either. Customers are the life blood of a business, and are needed to keep the business and business world moving. In business there is an 80/20 Principle the adage that 20 percent of customers equal 80 percent of sales.* It is much easier to sell to a current customer who are happy with the product and/or service you provide. Studies show there is roughly a 70% chance of generating more business from a current customer, than the likelihood of turning a prospect into a customer at a mere 15%.
This means you are almost 5 times more likely to generate income for your business from a current customer than trying to obtain a new customer. So why are business’ using so many resources to get “new customers”? By focusing time and resources on retaining customers rather than acquiring them, a business will be able to generate more income with less money spent. With all that new income, you can use some of it to help obtain new customers.
There are several ways a business can attract new customers, and it becomes even easier with social media. But once you get the customer, how are you supposed to retain them as a customer?
Here are 5 Ways to Improve Customer Retention
1) Keep Your Promises
You have done a ton of work acquiring the customer. ie. Advertising, responding to incoming emails, spoke with them on the phone, met with them in person etc…. Everything was done to show the customer why they should choose you and your company over anyone or anything else, but the day of the job you show up late, or even have to re schedule.
New customers expect the world from new companies or products because its their first time using said company/product. So even though it seems strange, you need to show exactly why you are better than the rest. Your competition are just a click or phone call away if you stumble or don’t follow through on promises. The worst part about the competition is, if the customer has a bad experience with your company/product, the competition just needs to be a little better to take the customer from you. Its unfortunate but its reality. You only get one shot to make a first impression so it better be a good one.
2) Be Present in the Community
Being a local company in any town, you probably want to give back to the city. It’s great for the business for several reasons: 1) It shows you care about the community and the people in it, 2) Charitable donations can be written off by the company at the end of the year, 3) Improves your reputation 4) Improves branding as it shows you are not just in business to make money, but also looking to give back and help.
It is customary now, even before a customer or potential customer sees your product or service, for them to look at your reviews and online ratings. This is very important, because if you have a not so stellar rating or even worse, you have a great one but your competition’s is better, its fair to assume the competition will be getting the first call instead of you.
If you have loyal customers, I recommend asking them to take a couple moments, if they can, to write a positive review on your website or Google. This can go a long way for anyone looking for your product or services. As well, customers are 61% more likely to click on a website or an ad with a rating rather than one without.**
Smaller companies tend to have owners who are industry experts. They have spent numerous hours working in the industry encountering mostly every problem possible. They have sacrificed a lot of time and money to learn and better understand their passion for the business.
They know exactly what they are talking about.
Owners tend to be the face of smaller business, so you can talk to them personally about what you are looking to have done, or if you have questions and concerns. By taking time to alleviate any hesitation a customer may have, their comfort and trust levels increase making your company or product their preferred choice.
5) Define and Eliminate Pains
When a customer is looking for a service or to buy a product, they are looking to alleviate a pain. This isn’t a physical pain, but more so an emotional or physiological pain. For example, ordering a pizza. You are hungry. Its quick and easy and doesn’t requite you to cook anything.
Maybe its a service, like Pressure Washing. Your deck has been weathered and you hate the way it looks, you want a new looking deck but don’t have the time, money, skills or patience to build one. Hire a company to pressure wash it will save you; time, money and sanity.
By solving a customer’s problem, or eliminating a pain they have, you are doing more than just providing a product or service, you are making them feel better and essentially helping them with a to do list. This allows them to have more free time and enjoy their lives a little more. By defining a customer’s pain, you will be better understanding of how to help.