Every small business strives towards having as many customers as possible. What’s more, they’re focused on ensuring that these customers do come back for repeat business. The main reason is that customer retention has become one of the most important factors for small business profitability.
The fact of the matter is that it costs around 6 to 7 times more to acquire a new customer than it costs to retain an existing one.
That said, retained customers oftentimes spend around 67% more than new customers. Furthermore, with only a 5% increase in retention rate, a business can improve its profitability by up to 95%. With that in mind, here are a few important small business strategies to improve customer retention.
Improving customer experience
Consumers nowadays prefer to do business with companies that provide them with exceptional customer experience. Such an experience involves everything from website functionality and speed to customer service and support.
As a matter of fact, consumers are willing to pay up to 25% more as long as brand and companies can provide a better experience.
On the other hand, if you cannot provide a seamless experience, you will not only be unable to retain customers, but they might also abandon your business for good. The fact of the matter is that 60% of consumers will immediately stop doing business with a company if they receive a bad service.
Consumers love personalized and customized offers. It makes them believe that you’re willing to cater to their individual needs and it makes them feel important. Personalizing offers is a very good strategy for ensuring customer retention.
However, you must first research your customers and learn as much as you can about them so that you can tailor your messages the right way.
For instance, try to gain more insight into your customer demographics and include some promotional gifts, such as the ones designed by FastPromotional Products, for instance. A good sales pitch alongside a meaningful gift will encourage every customer to come back.
Include a loyalty program
Another great way to increase your customer retention rate is to implement a loyalty program. If customers can see value in doing business with you, they’re more likely to return. A loyalty program is designed to provide customers with value, in fact.
That being said, 75% of companies that have a loyalty program are successfully generating ROI (Return On Investment). Moreover, 83% of consumers claim they’re more likely to return for repeat business if they are included in a loyalty program.
However, there are various types of loyalty programs that are specifically designed to serve a certain type of business. Therefore, make sure that you do, in fact, implement the right type of loyalty program that will work best for both your customers and your small business.
Convenience is another factor that encourages customers to come back. Creating a business strategy around convenience can really do wonders for your customer retention rates. However, the sort of convenience your customers might prefer depends on them and your business.
For example, 51% of consumers expect companies to be more available to them. You can achieve 24/7 customer support availability by leveraging either live chat or a chatbot feature. What’s more, some customers prefer self-service as convenient means.
You can include a knowledge board or an FAQ (Frequently Asked Questions) page on your website to serve self-service customers. In any event, providing convenience to customers can improve the retention rate, as well as make your customers more engaged and loyal.
Customer retention can have a major impact on a small business bottom line. Profitability comes from customers’ willingness to make regular purchases. You can’t ensure that customers will return for repeat business unless you give them a good reason to do so.