Posted: 28 May 2015 07:51 AM PDT
Photo (CC)
by Ninlan Reid, on Flickr
If you’re a business
owner, which appeals more: spending $20 to capture a new customer or spending
$1 to retain an existing customer?
These numbers represent
broad averages but reflect reality, according to research. This means developing
a sustainable business requires focusing first on building customer loyalty.
Every business needs to
build its customer base, but often the focus is on bringing in new customers.
Perhaps the better strategy is, first, retaining existing customers
because this forms a stable sales base and they become your ambassadors
as you turn to finding new customers.
Retaining existing
customers means providing them with what they want at a price they feel is
reasonable while offering them a pleasant shopping experience, and giving
outstanding customer service and support.
To do all of
this means listening to your customer.
However, one difficulty
business owners face is that customers will not rate each one of these items
equally, and each customer will have his or her own preferences.
Understanding the
customer and his or her preferences means coming up with a business strategy
that will work best for your situation. To some degree, that means building
around where the core of your customer base puts its values.
Yet understand that
with the tools available, it is possible to have customized approaches to
various groups or even individuals.
The goal is
customer retention. Yes, customer
retention or customer loyalty programs may have a cost, but based on the
research, these programs seem like a good way to spend your money.
That’s especially true when research shows that long-term customers
tend to buy more and more often than new customers. So you want to
keep your customers and keep them as long as possible.
Customer retention
programs are not a one-time effort. Internally, the customer changes, and
externally, the surrounding environment (think competition) changes. As the
customers have various experiences, they will come across other business
tools that they prefer. They may move, for example, from valuing price
savings to valuing service.
Help your
customers see how they get value from your relationship. Encourage them to tell you their ideas and thoughts for
change. And then take action on what they say.
Retaining customers can
have a great payoff. Making customer retention a mission of your
company is well worth your time and effort.
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Thursday, May 28, 2015
Success Grows Through Retaining Customers | SmallBizSurvival.com
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