It is intriguing to see how businesses spend a big chunk of their budget on getting people to their doors, but put little to no thought on customer retention strategy. Many small businesses work hard and pay a high price to get a client in the door, only to find their clients trying their services temporarily before and moving on to a competitor’s service. So here’s an important question: what would increase the chances of that customer coming back and even staying with you permanently?
The Obvious: Customer Retention Foundations
Most business owners take their customer retention strategy for granted. They see it as wholly encompassed within the timely delivery of quality products or services intertwined with customer respect. Of course, all of these components are the foundation of excellent customer service. Customers expect this treatment, and if your business lacks it, you or your business will most likely not be considered professional. The customer’s choice to walk away follows quite easily. So, what is missing to create some customer loyalty retention?
The Not-So-Obvious: Key Customer Retention Strategies
Knowing the market’s needs and the competition available to your prospects allows a business owner to not only have a useful background of information to draw on when interacting with clients, but also ensure that the products or services provided are at least competitive in the market. Note: when we say competitive, we do not necessarily mean cheap. For example, your product or service offerings may include payment options that are preferable to customers in your market niche.
A client who trusts you personally and professionally is more likely want to stay with you, since switching to another business introduces an element of uncertainty. Human decision making is always made on a foundation of trust, even though many times this may not be overtly expressed. What that means to you is that you need to develop a strong relationship with your customer based on mutual trust. When you listen to your customers’ needs, understand them, and then respond accordingly, they are likely to see you as a helpful, trustworthy, professional resource.
The more frequently you interact with your client, the higher the chances you can gather information about your performance (and adjust your practices accordingly). If you are waiting for your clients to provide you with feedback when things go wrong, you may be surprised to hear your customer complaints when it is already too late and they are on their way out. However, having an open dialogue allows them to point out minor issues. By you taking care of these issues, you demonstrate to your customers that you are on their side. Another useful tactic is to engage your customers proactively with a tool like a survey, especially after they have just made a purchase.
Unique Selling Proposition
This strategy incorporates knowing your market, knowing your client, and highlighting specific benefits that only you can offer to your customers. When customers value this special benefit, they may not even want to consider any other market offerings lacking your specific benefits. Seth Godin writes a great book about the unique selling proposition called Purple Cow. We highly recommend it, and its sequel, Free Prize Inside.
What is the impact of implementing an effective customer retention strategy?
How important is it to think about customer retention? All these strategies for customer retention management provide business owners with tools to increase profitability. In implementing a customer retention strategy, you may spend the same amount on getting clients to do business with you, but you see an increase in revenue per client. Moreover, customer loyalty retention presents itself as a natural basis for referrals, where clients talk about your services to their friends and you get additional clients at your door without even increasing your budget. With referral marketing, everybody wins!