Posted: Thu 30th Jun 2022
It's often said that it costs less to retain existing customers than to cultivate new ones. Repeat business is essential to any growing enterprise.
So what can you do to encourage it? In this blog, we lay out 10 tips for increasing customer loyalty.
Why customer retention benefits your business
In a report released by Barclays Bank, it was stated that just 53% of small and medium-sized businesses are using tactics to keep their existing customer base happy and ensure that those people return to them for future business.
An increase of as little as 5% in customer retention is thought to lead to as much as a 75% increase in the average business's profitability. Are you underestimating the opportunities that a customer holds for you once they're already part of your client base?
As a small business in today's business climate, you have something to prove. If you don't prove 'it', the likelihood is that customers will simply come in the front door and leave, very quickly, out of the back.
That isn't to say that wanting to attract new customers to your business is a bad thing; it's great when you get them.
But considering the time, money and effort that goes into expanding your customer base, it's just as beneficial to your business to look after the customers you already have, so they stay loyal to you in the longer term.
You've already done all of the hard work to pull these customers in, so why not develop your relationship with them further?
Studies have shown many times over that if someone is made to feel special by a certain business, they will go back to that business repeatedly, regardless of other changing factors. For example, if a customer already knows they're going to be well looked after, they'll be more willing to overlook changes in price.
10 tips for retaining customers and keeping them loyal
For the customer, the importance of receiving top-quality service can be a lot more important than paying the cheapest price. Here are 10 tips to help you retain customers and increase their loyalty.
1. A smile goes a long way
This is proven as the number-one way to ensure your customers will keep coming back. In the Barclays report, 59% of consumers said that a simple smile and friendly hello was what made them return to small and medium-sized businesses over and over.
2. Keep up with your customers
Your customers need to feel like you care about them and their business, if you're in the business-to-business (B2B) sector.
There are lots of ways you can show this, from sending birthday and Christmas cards, calling, emailing or chatting on social media from time to time. You might invite them to new product launches or ask for their feedback on products and services they've bought. It doesn't have to be a huge gesture; you just have to show you care.
3. Put yourself in their shoes
The better you understand your customer service and how your staff interact with customers, the better you will be able to understand how your customers feel when buying from you or making enquiries. Putting your service to the test can also help you refine and improve your processes.
4. Be proactive
Keep up to date with your customers' activity. If there's something unusual with their account, for example, such as a decline in usage or spending, give them a courtesy call to ask why and whether there's anything they'd like to change to help them get back on track.
Many customers won't complain about a poor service but just keep quiet and move on. Watching trends and being proactive gives you the chance to deal with problems and it'll impress your customer.
5. Create a loyalty scheme
These have been around for years, and they are a simple but effective way of encouraging customers to return to you.
You could follow the example of coffee chains, for example, who use loyalty cards to reward customers with a free drink once they've bought a certain number. Offering rewards for purchases or referrals gives customers an incentive to return to you – and they benefit, too!
6. Be available
If you promise to provide each customer with an account manager, make sure that account manager is available to them when they need them. If you don't provide account managers, be sure that your business is easily accessible.
Advertise your contact details clearly and ensure that you respond to queries quickly. People expect 24/7 access to services, so make sure that you're available to them, by email and by telephone.
7. Ask for feedback
Feedback from customers is one of the best ways to find out what they're happy with and what they're not. Understanding this and making sure you overcome the bad points will keep customers returning to you.
There's plenty of free software that will enable you to create a short customer survey, or you could contact individual customers directly.
8. Be flexible
When a customer comes to you with a complaint or problem, it's a perfect opportunity to show flexibility or a willingness to work to a satisfactory solution. You're also likely to find a customer who has had a complaint resolved becomes even more loyal as a result.
The short answer: customers like to be listened to, respected and valued. Going out of your way to resolve a problem, even if it's at your own cost, demonstrates this.
9. Be honest with customers
OK, not so honest that you trip yourself up. But if you know there's an error at your end, or a problem with your products or services that you expect you'll get complaints about, it's better to pre-empt it and be honest, rather than face the wrath of hundreds of unhappy customers.
Remember, the rule of thumb is that unhappy customers will tell more people about their bad experiences than happy customers will tell about their good. Everybody respects honesty, too, and they're likely to cut you some slack, providing you deal with the problem quickly and at no cost to them.
10. Say thank you
Whenever you're aware of a customer helping to boost your brand's awareness, you should show appreciation!