Keeping Customers Happy for Better Retention

December 11, 2020 by First Federal Bank

customersWhen you run a business, it’s easy to get caught up in gaining new patrons. However, taking good care of the ones you already have is every bit as important and is vital to steady, long-term growth. Here are a few ways to keep your current customers satisfied and loyal for years to come:

Understand the importance of customer retention

No matter what kind of products or services you provide, you need people to buy them, hopefully more than once. Whether that means a renewable contract or multiple one-time purchases, your most loyal customers are the most valuable. In fact, IMPACT’s Head of Editorial Content, Ramona Sukhraj, states holding onto a customer costs up to five times less than attracting a new one. She also says “a 5% increase in customer retention can lead to a 25% to 100% increase in profits for your company, whether it be through upsells, repurchases, or even referrals.”

Employ the right people, and take care of them

As a business owner, you need to rely on your employees to not just do their jobs, but to do them well. This is doubly important when their role is customer-facing, since they’re essentially acting as brand ambassadors, and a poor experience can drive customers away. Sukhraj says up to 78 percent of customers will cancel a transaction due to an unsatisfactory interaction, and it can take as many as to 12 positive experiences to counteract just one poor one.

The antidote, according to Joe Cecere, President and Chief Creative Officer at Little, is enthusiastic, committed workers. “Passionate, engaged employees can deliver personal customer experiences that create customer loyalty,” he said. In short, hiring people who care about your business can make a huge difference.

Open multiple lines of communication

At its core, a business relationship is still a relationship, and the key to success is communication. It’s vital customers have a way to let you know about their experience, regardless of whether it’s positive or negative. With that knowledge, you can identify problems in your operation or reward employees for success. It’s important to respond quickly, though, as Sukhraj says half of consumers will give you no more than a week to answer a question before turning to a competitor.

Communication isn’t a one-way street, though. Multiple experts suggest being proactive in reaching out to your customers can increase retention. Regular newsletters, interactions on social media, and directly asking what your company can do better can begin a dialogue and build a relationship. HubSpot.com’s Sophia Bernazzani even encourages you to set up a communication calendar so you can stay in contact with your regulars.

Be more than a business

In his best-selling book, “Start with Why,” author Simon Sinek said, “People don’t buy what you do, they buy why you do it.” In other words, businesses that develop a core principle customers can relate to and believe in will build lasting loyalty. Harvard Business Review writers Karen Freeman, Patrick Spencer and Anna Bird cite a study that stated, “Of the consumers in our study who said they have a brand relationship, 64% cited shared values as the primary reason. That’s far and away the largest driver.” They suggest the first step in building lasting relationships with your customers is “clearly communicating your brand’s philosophy or higher purpose.”

Ultimately, loyal customers are what make a successful business. If you follow these guidelines, you’ll be on the road to increasing satisfaction and improving your bottom line.

Categories: Small Business, Entrepreneurship

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