Smart business owners know it’s much more cost-effective to retain customers than it is to acquire new ones. In fact, according to Harvard Business Review, some experts estimate that it can be anywhere from five to 25 times more expensive to spend time and money on getting new customers to convert to your brand.
Beyond helping your organization avoid hemorrhaging funds, customer retention is vital for sustainably growing your business. When you retain your customers, they tend to spend more over time. And the longer you retain your customers, the more you can learn about your customer base – which empowers you to make informed decisions about the products or services you offer, so you can better meet their needs.
Because customer retention can generate so much value for your small business, you need to get your retention strategy right. In this article, we’ll walk through five tips to maintain returning customers:
- Offer best-in-class customer service
- Start a customer loyalty program
- Provide easy-to-use customer-facing tools
- When you make a mistake, make things right
- Collect and use customer feedback to improve
These tips will help you fine-tune your retention strategy. As you review them, consider what you know about your most loyal customers and what has made their experience with your business positive. This insight will guide you when applying these tips to your specific organization.
1. Offer best-in-class customer service
How you treat your customers plays a major role in how they feel about your business and whether or not they’ll buy from you again. Thus, it’s essential to provide the best customer service possible.
Here are some best practices to keep in mind for offering great customer service:
- Respect each customer – Customers want to be seen as people, so make sure you’re treating them with respect. Use their names, speak with warmth and positivity, and let them know you care.
- Be a proactive communicator – Don’t wait for your customers to come to you. Proactively communicate with them. For example, if you own a pet boarding business, don’t wait for your customer to call you to check in on their pet. Give them regular updates, so they feel prioritized and involved in their pet’s care.
- Don’t rush customer interactions – Avoid viewing your customers as to-do list items to be checked off. If a customer has a question, take the time to give them an honest, thoughtful answer. If they want to chat at your sales counter after a transaction, hear them out and interact with them instead of rushing them out the door.
Customer service can make or break an individual’s experience with your business. Approach every customer interaction with friendliness and an eye to the bigger picture – providing them with great services or products and maintaining their loyalty.
2. Start a customer loyalty program
A customer loyalty program can be a great way to inspire customers to not only continue giving you their business, but also increase their spending and engagement to get special perks.
You can structure a customer loyalty program any way you see fit for your business. You might offer punch cards that reward a customer with a free or discounted product after purchasing a certain number of products or services. You could create a membership program with different tiers (for example, silver, gold, and platinum) that offer corresponding rewards based on how much they spend over time. Or, you could set up a point redemption system.
However, if you decide to structure your program, ensure that you’re approaching the loyalty program creation process with your customer data in mind. The information you’ve collected about your customer base can inform the rewards you offer. For example, you might see that your shoe shop customers frequently add on a shining service when making a purchase. You could then offer a punch card that gives loyal customers a free shoeshine after spending a certain amount at your store.
3. Provide easy-to-use customer-facing tools
For your customers to want to continue engaging with your business, you need to provide user-friendly tools that allow them to quickly and easily buy from you. Streamlined service that customers can tap into right when they need it will help you stand out from the crowd and be top-of-mind when someone needs your goods or services.
Here are a few examples of customer-facing tools you can use to boost customer retention:
- Payment tools – Your business’s payment processor should be able to take payments quickly and securely. This will provide every customer with peace of mind and convenience, whether they’re inputting their information online or swiping their card at your storefront.
- Booking software – If your business model requires people to book appointments for services, you should offer robust and intuitive booking software. For example, Gingr’s dog daycare software offers a customer portal that allows customers to quickly and conveniently book appointments, sign required forms, pay invoices, and even see pictures and videos of their pets. An all-in-one booking solution like this makes it simple for customers to sign up for your services again and again.
- Your website – Your website should serve as the information hub for your business, answering common questions and providing important contact and purchasing details. You can even include house payment forms and booking software on your website, making it the one-stop shop for interacting with your business online. Ensure that your website is easy to navigate and accessible for users of all abilities, so that every customer can use it.
Just like how slow wait times at a restaurant or long checkout lines at a grocery store can frustrate and deter customers, having the wrong tools available to customers can also negatively impact their experience. Investing in easy-to-use customer-facing tools helps plant the seeds for customers to return and remain loyal to your business.
4. When you make a mistake, make things right
No business is perfect, and problems with the customer experience will inevitably happen from time to time. Wires get crossed, miscommunication occurs, and mistakes get made. The good news is that a mistake doesn’t have to permanently sour a relationship with a customer.
When you sincerely try to make things right, you can demonstrate to customers that you care about their experience and want them to get the most out of their interactions with your business.
For example, say you own a pet grooming business, and there is a miscommunication between one of your groomers and a customer, resulting in a dog getting a haircut that is not what the customer wanted. Instead of becoming defensive or insisting the customer accept their pet’s new look, you might look at a few different options for rectifying the situation. You could waive their payment, fix the haircut for free, or offer them a discount on additional services or products.
By showing your customers that you’re striving to do right by them, you’ll build trust with them. Over time, this trust will build into sustained loyalty, as your customers recognize that your business is honest and open about mistakes and does its best to fix them.
5. Collect and use customer feedback to improve
Sometimes the best way to boost customer loyalty and retention is to walk in your customers’ shoes. You can do this by collecting feedback from them.
Of course, gathering feedback won’t do your business any good unless you’re willing to take action on that feedback. Ensure that you have a clear process for putting your feedback to good use, so customers see that you’re being proactive about making positive changes to your operations.
Here are a few ways to gather customer feedback:
- Send out customer surveys via email
- Ask customers to leave online reviews
- Post polls on social media
- Have conversations with focus groups
You can elicit feedback on a variety of topics, from your marketing strategy and communication efforts to your staff’s customer service skills or the products you sell.
As you take in the feedback, focus on the most pressing or prevalent issues to kickstart your improvements. Doing so will ensure that you’re dedicating enough time and resources to developing processes or offerings that will benefit your community of customers.
Retaining customers and building loyalty with them pave the road to sustainable business growth and success. Follow these tips to build lasting relationships with your customers and keep them coming back!
About the Author | Casey Dorman
Hi, I’m Casey! I’m the Sales Manager at Gingr software. Originally from Indianapolis, I now live in Colorado with my wife and dog, Dexter. Our hobbies include hiking, skiing, and visiting local breweries.