It is more costly for a small business to attract and acquire new customers, approximately six to seven times more costly, than it is to retain previous customers and turn them into repeat shoppers. Customer retention is vital for new companies and small businesses specifically because it offers one of the easiest ways to help startups grow. Providing good customer service is a basic practice, however, there are a variety of other tactics your small business can use to boost customer retention.
Create a Meaningful Brand
Stores or businesses with a brand that stands for something, a specific cause or positive message, have the highest customer retention rates. Having a strong brand identity is one of the keys to turning initial customers into regular customers. It is important, then, for a small business to build up a brand with clear and defined standards or a specific, positive message that is unique and meaningful for customers.
Staying in consistent contact with customers is a good way to make sure they feel their business is important. Sending out emails on a weekly basis with updates and information about new products or special sales keeps your small business in the forefront of the customers mind. For a more personal touch, consider contacting customers on their birthday, or for another occasion that is unique to them, and offering them well wishes and a special coupon or code for discounts on their favorite items, or on their total purchase.
Embrace Customers’ Inner Egos
When talking to customers and planning marketing campaigns and product designs, embrace a cognitive bias known as “implicit egotism.” This simply means tailoring your business plan, designs, marketing, and outreach to target customers’ wants, needs, struggles, and other aspects of their day-to-day lives. This tactic ultimately involves targeting customers with the specific products and/or services that your small business supplies. It should also play a role in the meaningfulness and message of the brand being created and marketed. By doing this, it is easier for a small business to fill the demands of existing customers and keep them coming back as regular customers.
Utilize Product Momentum
A successful small business develops new products on a semi-regular basis or, at least, reformats and makes improvements to existing products. This creates a feeling of excitement, an energy or momentum among the company’s insiders and employees. Avoid letting the momentum remain in-house; pass that energy along to your customers. This can be done in multiple ways, through emails with pumped-up marketing and local advertisements, and through other moves such as developing new packaging, changing a store layout, and verbally sharing with customers as they enter the store. Don’t stop with just letting your customers know about new or improved products or services; go the extra mile to educate them about how these new goods and services benefit them. Continue to project your business as one that is constantly striving to make your customers’ lives better.