Four Ideas for Improving Customer Retention
Getting a customer in the door for the first time can be tough — but getting them to come back is actually an easier task. It’s well worth the extra effort required to hook a loyal customer: Attracting a new customer requires five times more money than keeping an existing one, according to research by TARP. And when you treat your returning customers well, they’re likely to spread the word to their friends, expanding your customer base through word-of-mouth.
Here are a few ideas on how to score a customer for life:
1) Make your customer service worth bragging about. Customer service will make or break your business: 60 percent of customers are willing to pay more for a better customer service experience, according to a Harris Interactive report. Providing helpful information and stellar service — even when there’s no extra profit in it for you — will encourage them to choose your business even when lower-priced alternatives abound.
2) Introduce a customer loyalty card. Give your customers extra incentive to buy from you by handing out punch cards, in which customers can receive a discount or free product after a certain number of visits. For instance, if you own a coffee shop, offer a free latté after ten full-priced visits.
3) Offer a discount for prepaid packages. If you own a service that customers are likely to use frequently, consider offering a “season pass” deal, in which customers receive a discount for purchasing a set service arrangement in advance. This works well for service-based industries like tutoring or personal training. If the customer doesn’t use the full package within a predefined time limit, your profit margin goes up.
4) Address customer complaints or issues immediately. Even if the customer’s problem doesn’t seem like a big deal, it can quickly blow up if not handled properly. 84 percent of patrons say they would tell their friends about a negative experience, and may even blog about it — so you can kiss all those new potential customers goodbye. In contrast, if you apologize for your faux pas and make it up to the customer, he’s likely to remain loyal and tell his friends about the fix. That can give your business a big boost, too: 42 percent of customers who hear about a positive product experience from a friend will then purchase the same product, according to TARP.
What measures have you taken to keep customers coming back for more? Share your success stories in the comments.