Have you ever stopped to think why customers leave your business? Some time ago, a comprehensive survey was undertaken and the results were clear. They are only averages but the chances are that these figures will apply to your business. Here are the results.
a) 1% die
There is not much you can do about that! Alternatively, businesses may close down so be very careful when offering credit. There are usually warning signs before a business closes down. More often, a business will get taken over as a going concern but you will then need to work hard to continue to do business with the new owner.
b) 3% move away
This is something that is difficult to overcome, especially if you are a local business such as a drycleaner. It is important for your local business to have the right demographics for your product. Ideally, you will be located in a growing region. This problem has forced many rural businesses to close down as city living is preferred by a larger part of the population. Other places such as coastal towns experience growing populations.
c) 5% form other relationships
Often, a relative, a friend or other reputable person will recommend your competitors to your customers.
d) 14% are dissatisfied with your products or services
You only have one chance to make a first impression so if your customers are unhappy with your product or service it may be very difficult to get them to come back.
e) 68% of your customers will leave your business because of perceived indifference towards your business from the customer
Even if you think you do a lot for your customers, it is possibly that your customers do not see it that way. How you treat your customers is never about you. It is always about how your customers feel. Many businesses are startled to discover that their customers do not think as favourably about their business as they thought.
The bad news is that customers are less loyal than they used to be. In the past there were less businesses around and much less competition. Even if you did just an adequate job in serving your customers, there was always the likelihood that your customers would stay because they had no alternatives.
Times are different now. Competition is rife. Customer retention is vital to your profits and also to the growth in your business.
How Do You Begin To Retain More Customers?
The best advice I can give you is to always exceed your customers’ expectations. It is not acceptable to have customers leave your business because they feel indifferent towards your business. It is up to you to create customer loyalty. Let’s look at four ways to improving customer retention.
1. Improve your products or services. Provide your customers with products and services that they perceive to be high quality. If you are a retailer, then source suppliers that offer better quality products or buy in bulk to give you better buying power. If you are a manufacturer, maximize your resources and develop better products. Never sit still. Never sit still. Spend time on research and development and keep improving your procedures.
2. Improve your customer service. Quite frankly, this seems easy but experience shows that most businesses fall short in this area. To really excel, you need to be consistent with your service level and aim to be exceptional. Great customer service is judged on the way you greet people on the phone, how you interact with them when they walk into your place of business and how you respond to a customer complaint. The golden rule: treat people as you wish to be treated. Your job is to turn them into fans of your business, rather than just another ‘satisfied’ customer. Often, this is not expensive to achieve but simply requires the right management and right culture in your business.
3. Improve your marketing. This is often overlooked. Too many businesses adopt the attitude that the hard work is already done in getting the initial sale. Well, you need to continue to retell your story and continue to market your business effectively. You may want to market your business with different media and different offers.
This is where Bartercard can help. Bartercard members can use their trade dollars to market their business instead of tapping into their cashflow. You could build a better website and then use a Search Engine Optimisation company to bring more traffic to your website. You can use direct mail by purchasing mailing lists on trade as well as print advertising, radio advertising, television advertising and fax broadcasting. Do not fall into the trap of marketing in just one way. Use your trade dollars to use multiple media to bring in more cash sales.
4. Improve your relationships. The ultimate goal is to get to the point that your customers think of you like family. These customers simply will not leave for any conceivable reason, including price increases. This type of relationship is grown over time and comes with trust generated through great product or service and exceptional customer service. This can make the difference between a good customer and a great customer.
Think about ways to make your customers feel appreciated. Many businesses only contact their customers when they want to sell them something and customers can sense this. You need to have other reasons and methods to contact your customers. Could you send Christmas cards, birthday cards, thank you cards, corporate gifts, e-cards and promotional items such as calendars and fridge magnets? These are a few ways to make your customers know that they are important to your business and will keep your business front of mind.
Another way to make a great impression with your customers is to send them a monthly newsletter. Let them know what specials you are running and provide relevant and interesting content.
So start today, address the four ways to improve customer retention and turn indifferent customers into loyal fans of your business.
Ian Renton is the writer of his fortnightly ezine, SmallBizTips, now read by approximately 10,000 subscribers and his monthly printed newsletter, Keep Your Customers For Life.
Ian is the author of Debt Collection Made Easy, an easy guide to collecting your money quickly and efficiently as well as a thorough look at the local court system and how it can be easily used to collect money yourself at minimum cost to you.
His next book about Customer Retention is due to be published in 2014.
Ian Renton is a Bartercard member and the owner of four businesses, Australian Credit Stationers, Australian Christmas Cards, Renton's Labels and Renton's Printing. His businesses provide account stickers, Christmas stickers, corporate Christmas cards and e-cards, corporate birthday cards, thank you cards, calendars, custom labels and general printing to thousands of businesses in Australia and New Zealand.